I think that NetFlix is one of the most brilliant strokes of genius in the short history of online commerce, ranking right up there with eBay. As I understand it, the founder of NetFlix was presented with a mathematical puzzle in business school where they had to compare the data transfer speeds of various bandwidth levels– comparing, for example, how long a specific amount of data would take to transfer through a 28.8 modem vs. a T1 line. When the teacher asked whether a T1 would be as fast as a station wagon filled with DVDs driving from LA to NY, everyone thought it was a joke… but it turns out the station wagon would take a LOT less time. The idea for NetFlix was born.
Blockbuster was fairly quick to steal this idea– their stores now offer a $24 package where you can rent movies at the store using a model similar to NetFlix. (you can have 2 movies out at a time, return them at your leisure, etc.) However, since they unveiled this, their shelves are bare of many of the more desirable movies. Users tend to hang onto movies for weeks at a time, making it hard to get the movie you want.
Finally, Blockbuster has come out with a genuine competitor to NetFlix: an online service, which I just signed up for. $15 a month and I get 3 movies at a time, just like NetFlix. The difference is that I get coupons for in-store rentals, allowing me to do spur-of-the-moment rentals. If I just happen to be in the mood to watch a given movie at the drop of a hat, I can do it. It’s perfect.
Postal rentals are delivered promptly (they have regional distribution centers just like NetFlix) and their selection is HUGE compared to what is possible in stores. I hate to admit it, but this is a better service than NetFlix.