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Netflix Buys DVD.com Domain Name

Ah, mixed signals: the bane of business and personal relationships alike. Netflix has become quite an expert in the mixed signals business with its stance on its bread-and-butter DVD business. After multiple comments by CEO Reed Hastings about Netflix being a “streaming company”, Netflix continues to hedge its bets with the lowly DVD.

The company’s latest move demonstrating it’s not quite finished with DVDs is its purchase of the domain name DVD.com. The name now automatically redirects you to dvd.netflix.com.

Steve Swasey, Netflix’s VP of corporate communications, gave the following brief response when questioned by GigaOM about the domain name acquisition:

“Netflix cares about keeping DVD healthy, and this is just one small investment in keeping DVD healthy.”

After unsuccessfully trying to spin off its DVD business with the ill-fated Qwikster move last year, Netflix has driven off a lot of its DVD subscribers. Comments by Reed Hastings, as well as Netflix’s major investments in streaming-only content, have also demonstrated a major shift in the company’s thinking away from DVD.

Why this domain name purchase, then? Maybe Netflix took a long look at its DVD profits and has some new DVD initiative up its sleeve. Or maybe this is just a simple move to prolong the life of the DVD side of its business model. Hit the comments and tell us what you think, Insiders.

[via GigaOm]

9 Responses to “Netflix Buys DVD.com Domain Name”

  1. Member [Join Now]
    FREE-MOVIE-BIZ.com [free-flixsnow]

    Interesting,

    Given the position NetFlix holds in the DVD movie rental industry, and the fact they had revenues of $3.2 Billion in 2011, and this was after losing near a million subscribers when they raised prices 60%, and they still saw a near 50% increase in subscribers, no way are they going to dump their DVD business.

    If you look at streaming video market, no doubt, it will carve out a niche, but do not expect any company to put all their focus on streaming with the already limited bandwidth currently available on existing networks and you will see the problem, just as NetFlix has seen it recently. AT&T just cut off contracts for those with data plans, just as Verizon has done, so for those who know the smart phone industry, Apple has choked data consumption to a point of no return.

    Can you even imagine what would happen if everyone was streaming over the limited existing bandwidth, it won’t work, nor will any cell phones which you have already seen what AT&T went through when they signed exclusive with Apple, they maxed out bandwidth and complaints of dropped calls exploded.

    NetFlix is staying with DVD rentals for that reason alone, the focus will not be on streaming anytime soon. Think about it, they have millions of DVD’s in their inventory, and they are paid for, meaning they are bringing in millions a week with very little overhead. They have distribution centers all over the country, equipment, trained staff, and a major share of market in their back pockets, so no way would they shift focus to streaming which at this point has an uncertain future unless more bandwidth is awarded by gov.

    Just like when BlockBuster ruled the industry and put all the independents out of business, but didn’t read the market trends accurately, and kept the big box retail outlets on the books way too long, it killed them when NetFlix hit the market. The RedBox which usually were located next to BlockBusters, as it was in my area, it was the beginning of the end for the gorilla in the industry. It all comes down to one thing, lowest prices driven by this recession. When NetFlix raised prices 60%, people jumped, and most jumped to RedBox as I see it as it looks to be a lower price alternative, but really isn’t for most. RedBox then raised their prices, so consumers are looking for a lower cost option.

    Look at the cable and satellite movie rental industry, off 12% last year, why, because at an average $6.99 per movie, which is what I was paying, it is crazy. Then look at the local theatre prices, no longer is taking a date a cheap date, yet who wants to give up entertainment, no one. Simply put, low prices will drive the market to even higher growth, but low prices will not come from the big boys, it will be driven by new companies as I have seen, and just as BlockBuster got buried in overhead issues, and just as BestBuy is closing hundreds of retail stores due to same issues, the only way to compete is to have lower overhead business model, and that is the future of the movie rental industry. Streaming will be part one part of industry, but so will kiosks as with RedBox, but soon you will see them in smaller stores and in rural areas as prices drop. It is just a matter of time, but DVD’s will always exist and dominate industry of movie rentals.

    Get Paid To Watch Movies and Play Games is the new low overhead model which will be driven on referrals, not big box retail outlets, direct mail, kiosks or streaming, it will include all of the above. The latest technology will be added to kiosks where you will insert your USB flip drive in machine and download movie to take home, so this will be an additional option as we see it. Time will tell as it always does.

  2. Visitor [Join Now]
    Nosgoth1979 [visitor]

    I wonder if by DVD, they mean DVD and Blu-Ray? DVDs are alive and healthy now, but the medium is nearing the end of its life-cycle, Blu-Rays are becoming more and more common, and yet, Netflix is still charging extra to rent them. I dropped them when my employer, DISH, released the Blockbuster @Home package and have been much happier since. From the looks of this, Netflix still hasn’t really gotten things figured out any better either. Blockbuster @Home has movie AND video game disc rentals by-mail, they don’t charge extra for Blu-Ray, plus they have unlimited streaming included, you know…like Netflix used to.

    • Visitor [Join Now]
      jamie [visitor]

      yes but you have to be a Dish customer to get the streaming. It’s a very limited audience. As has been pointed out on this forum and others, BB by mail’s turn around time is much slower then Netflix and they don’t ship on Saturdays.

      • Visitor [Join Now]
        Courtney C. [visitor]

        very true. we are streaming netflix subscribers–former subscribers of both disc and streaming– but i got a free month of blockbuster by mail so i tried it out. in the short span of the month, i got In Time and one other movie that was low on my queue list and wasn’t a new release. with netflix, at least you can expect a new movie every 3-4 days. i would hardly compare the two.

  3. Member [Join Now]
    raww

    Now that Blu-ray prices are pretty much the same as DVDs, it doesn’t make sense for Netflix to charge the extra fee…except for the simple reason that they can. And as long as people are willing to pay it, then Netflix will continue charging it.

  4. Visitor [Join Now]
    jc [visitor]

    If you use blockbuster, it takes a week from the time you drop the disk in the mail till a new one arrives. With netflix, it takes 3 days. And blockbuster streaming charges per movie. Switched to blockbuster, and totally regretted it. Now back with netflix.

    • Member [Join Now]
      stewarthouse

      If you have Dish, which by the way is so much better than cable, especially with the constant price raising cable does, you can also have Blockbuster.
      The movoes are frequent enough for me since after we watch one in the mail, we take it to the Blockbuster store and trade it for whatever we want for free. We tried Netflix streaming for a free month trial into our blu ray dvd p;ayer. It was terrible. There were very few movoes avaiable to stream. And every single movie we streamed would stop and reload and then we had to figure out where it left off. Too frustrating — won’t ever try Netflix again.

      • Visitor [Join Now]
        Courtney C. [visitor]

        i wonder if that would be more your internet provider (?) i’m not an expert – just wondering. we’ve had netflix for three years and have only had minimal problems with the buffering. we also have hulu plus and have constant problems w/ the speed of their video.