Avi Greengart is the Research Director for Consumer Devices at Current Analysis (Mobile Phones, Connected Devices, and Digital Home). He also regularly writes for Slashgear, sporadically blogs at Home Theater View and Tweets far too often as @greengart. Avi's expertise lies in understanding consumer electronics marketing, consumer behavior, and technology adoption patterns: where new technologies meet the mass market.

Avi Greengart is an expert on the convergence of technology and entertainment: video, audio, computing, and wireless, how these are coming together, and what's likely to survive long enough to make a difference in your life.

Column 22 February 7, 2002

Renting DVDs Online

Question:

Think I saw something about NetFlix on your site. Is it a good deal? $20/month equates to 7 movies (but they seem to have many more than local shops near me - no BlockBusters). Are there competing services?

AskAvi replies:

My search turned up several online rental places, but Netflix is the big dog; it was one of the first sites to rent DVDs online, it has the best site – including Amazon.com style recommendations – and it has the best movie selection. As far as I can tell, they have more titles than any other rental store – online or off. As the largest online rental site (with over 400,000 active customers), they have suffered from growing pains from time to time, with dramatically reduced title availability. However, they do seem to have mechanisms in place now to recognize and remedy the situation fairly quickly. Moreover, their policies are fair and their customer service is responsive. In my opinion, the only reason to go with an alternate provider is to find a provider that will let you rent one-at-a-time, rather than Netflix’s monthly subscription model.

In terms of whether Netflix is a good deal, I personally think it’s fantastic. However, from a purely financial perspective, it may not always work out to your advantage. Their current introductory offer is $20 a month for unlimited rentals, no due dates, no shipping charges, with a maximum of three movies out at any time. If you simply rent three movies from BlockBuster and return them on time, you’ll certainly come out ahead renting locally. At the other extreme, if you watch your Netflix movies the day you get them and put them back in the mail the next day, you can get six and sometimes nine rentals into a month (depending on the speed of the US Postal Service). Practically speaking, Netflix is almost always less expensive than renting locally if you frequently pay late fees, and is always more expensive if you regularly rent just two or three titles a month and return them on time.

But money is not the reason to love Netflix. I compare Netflix to a cable bill: you pay a monthly fee to have access to entertainment. With Netflix, you always have a movie you actually want to see waiting for you (whenever you return a movie, they send you the next title on your list; my Netflix list is 50+ titles long). It saves you from Light Romantic Comedy disease (the only genre we’d ever rent from Blockbuster): with Netflix, you’re free to rent epics or heavy dramas or obscure films just to have lying around until you’re in the mood for them. With no due dates, you have time to go through all the DVD supplements. You never have to go out in the rain to return it so as not to incur a late fee – you never have to go anywhere to return it at all.

So, getting back to my cable analogy, Netflix is half the cost of my cable bill, allows me to dictate the content I want, and provides much higher quality picture and sound. I highly recommend it.

-avi

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