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Wal-Mart Has Left The Building (to Netflix)

May 19, 2005

Apparently Wal-Mart has thrown in the towel on online movie rentals, and is directing their customers to Netflix.

Wal-Mart Stores Inc. and Netflix Inc., rivals in online movie rentals, made an agreement in which Wal- Mart ends its rental business in exchange for Netflix promoting its DVD movie sales. Netflix shares soared as much as 24 percent.

With rumors floating that Blockbuster is looking to raise their rates $3 a month (or depart the online rental scene altogether), and that Amazon is considering a partnership with Netflix, this has been quite the banner week for the Los Gatos, CA based company.

Of course, this is still all liable to be short-lived. Every time broadband speeds climb up a notch, the ghost of Andy Warhol runs past their offices with a stopwatch in his hand…

A lot of the comments on other sites regarding this story complain about Wal-Mart’s shipping speed, and the fact is I’m an instant-gratification boy myself (who’d have guessed?). I stopped doing Netflix when I realized I was far more prone to drive the two blocks to the neighborhood Blockbuster and have the movie in my hand immediately than I was to add it to my Netflix queue.

The day bandwidth and compression rates cross the line to where people can stream a DVD-quality download fast enough to watch, this market segment will be history.

(via literally everyone)

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