Wal-Mart vs. Netflix

Wal-Mart announced final pricing for their Netflix competitor DVD rental-thru-the-mail service, and it's cheaper than their beta pricing and cheaper than Netflix. Wal-Mart's pricing:
$15.54 for 2 DVDs out at a time, unlimited rentals
$18.76 a month for 3 DVDs out at a time, unlimited rentals
$21.94 for 4 DVDs out at a time, unlimited rentals
(Who came up with these random prices, anyway? Obviously not a marketer--no one will remember these figures)
Compare this with Netflix pricing:
$13.95, customers can get four rentals a month
$19.95 a month for three movies out at a time, unlimited rentals
$29.99 for five DVDs out at a time, unlimited rentals
$39.99 for eight movies out at a time, unlimited rentals
I'm a long-time Netflix customer, and I'll admit that the Wal-Mart pricing is tempting, despite the fact that they are the evil empire. Forget all of the 3+ movies out at a time deals. The one that's really intriguing is the Wal-Mart offer for 2 DVDs out a time for $15.54 a month, with unlimited rentals. Netflix used to have a comparable service, at $14.95 per month for 2 DVDs out at a time, unlimited rentals. Unfortunately, I canceled that service when I went on sabbatical, and by the time I returned they had nixed it. Why? Because no normal person needs to have 3 rental DVDs at home at a time. If you finish one movie, you can mail it back and get another back in the span of 3 to 4 days, and if you can't keep yourself occupied on that model with 2 DVDs at a time, you are a total loser and need a job. Netflix probably realized that most people would realize this and switch to the $14.95 plan, depriving them of $5 a month in subscription.
Now they have to acknowledge it again.
The negatives on Wal-Mart/advantages for Netflix:

  1. Their selection of movies is not as good as that of Netflix, not that Netflix's selection is the end-all be-all. For example, I have Devil's Playground on my Netflix rental list, but Wal-Mart's search engine didn't return it (that could be an issue with their search engine, though; see my next point.

  2. Their website is buggy. The search engine often doesn't work--I tried searching for Barbershop off of the page for Frida, and the movie Barbershop didn't come up despite being featured on their homepage.

  3. The switching costs from Netflix involve porting some 81 titles from my Netflix rental queue over to Wal-Mart, and my free time is precious. Someday hopefully we'll be able to port our DVD rental wishlists from one company to another using a web service, driving the switching costs towards zero, but for now it's a hassle.

  4. Fourth, Wal-Mart is evil and I don't want them to have more of my money (okay, maybe they aren't, but most things I've read about them suggest hints of darkness, and they also sued my employer a few years back which wasn't very endearing).

  5. When Netflix expanded their distribution network, transit times for DVDs through the mail improved dramatically. When I drop a movie in the mail, it gets to Netflix in two business days, and Netflix then promises to get a movie back to me in three business days but usually delivers in one or two. That speedy turnaround has really changed the financial equation in Netflix's favor as compared to renting from Scarecrow Video, which costs me a minimum of 30 minutes round trip if traffic is clear. In these days of high gas prices, and because I watch quite a few movies each month and hate driving anywhere, DVD rental through the mail is an obvious winner.

Some people might see the built-up ratings and recommendations of current Netflix customers as another switching cost. Personally, I've rated over a hundred movies in Netflix and don't find their recommendations useful at all. Maybe I've just seen too many movies. I get most of my recommendations from reading, Amazon, and friends and use Netflix for fulfillment (that always sounds funny, though to say I use them for physical fulfillment would sound even worse).
What to do, then? I'm not canceling my Netflix subscription, but I signed up for a Wal-Mart 30 day trial today. If their service is solid, perhaps I'll switch. Every dollar counts, a truth which Wal-Mart has built an empire on. Hopefully Netflix will match the Wal-Mart 2 DVD at a time program, if not exactly in price, then at least close. Netflix doesn't have the financial clout to compete with Wal-Mart in a price war, but enough of their customers will stay loyal to them if they show good faith in competing (some consumers will do the right thing if they feel that companies or artists are trying to meet them halfway; it's the reason I bought about 20 songs off of the Apple Music store yesterday even though I could find all of them quite easily using Kazaa). At the very least, this should spur Netflix to think more creatively about how to improve their website and service--it's been fairly stagnant for a long time.
Footnote: Greencine is a DVD rental site that stocks more esoteric movies than Netflix or Wal-Mart. It's the only site that rents Battle Royale or Eraserhead, it has a huge selection of Asian and anime titles (want to see Infernal Affairs, which I just saw at SIFF? Greencine has it already), and its selection generally puts its more well-capitalized competitors to shame. They're as close an analogue to Scarecrow Video through the mail as I've found. I might switch over to them, though $21.95 a month means a lot of pressure to get through at least 1 movie a week to feel like you're getting your money's worth. They seriously need some software help as well. The site layout and search engine are poor. From a selection standpoint, however, they rock, making them a viable option for true movie buffs.