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One of the presumed targets of Best Buy’s new CinemaNow store is by-mail and streaming giant Netflix. According to The Motley Fool, however, it’s not Netflix that should be worried about the new service, but other video renters, including Redbox.

Here are the reasons cited by the Fool why Netflix (and its investors) should welcome rather than fear the launch of the CinemaNow service:

  • A wider range of devices that can play CinemaNow videos will also be fertile ground for Netflix to insert its own video platform. Would you rather buy a Blu-ray player that supports one digital video service, or a player that offers all of the important ones? Healthy competition will help the addressable market grow.
  • The pay-per-rental model fills a different niche than Netflix subscriptions, and I think Best Buy is more likely to expand the total digital video market than to steal customers from Netflix. Investors in Blockbuster and Redbox operator Coinstar should be much more worried, because Best Buy is aiming at the heart of their market.
  • The more, the merrier! If CinemaNow gains traction with consumers, the studios will have one more data point showing that video downloads work as a business. In the end, Netflix and everybody else will benefit from a more open licensing environment and wider market acceptance of the whole digital concept.

What do you think, Insiders? Do Redbox and ailing Blockbuster have a lot more to worry about than Netflix? If it’s successful, will CinemaNow help usher in the digital era more quickly? Give us your take in the comments.

(via The Motley Fool)

9 Responses to “Netflix has Nothing to Fear from Best Buy’s CinemaNow?”

  1. Visitor [Join Now]
    Farva [visitor]

    Personally for me, I don’t rate the brand name Best Buy much higher than I do Blockbuster. I think Best Buy needs to just focus on their consumer electronics business and stay away from the video rental business.

  2. Visitor [Join Now]
    Ditto [visitor]

    That’s right. And the Studios need to understand that they do not control the public, it is consumers who will dictate the market. In fact, it is not about what the newest technical variation for content delivery they offer to meet their goals, it is the goal that matters. That is, the more they are trying to come up with ways of making people pay more, the more people will stick to ways that allow them to pay less. Isn’t that true?

  3. Visitor [Join Now]
    Tee [visitor]

    Ok, first how much is it per movie?? Second will the masses really dilly around with this considering the movies are already available thru cable on VOD, and are ready to watch immediately on their beautiful HD TV?

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      It’ll be the same price as every other service out there. I agree cable is already positioned nicely here. These new hopefuls will be hard pressed to turn a profit.

      • Visitor [Join Now]
        Atomic [visitor]

        I use Netflix via my wii. Why would I want to go buy something else to watch videos through it with another company when I already have Netflix via wii. They will have to market something totally awesome for me to spend money to do what I already do.

  4. Visitor [Join Now]
    It's ALL about options! [visitor]

    CinemaNow has the best Quality/pricing option of all the VOD providers, including cable. Even though I have a Netflix subscription and can access it from a PS3, a Wii and a LG BD player that also has VUDU and CinemaNow, I choose to use CinemaNow. They rent new releases for $3.99 versus the competition’s $4.99 and $5.99 (including Comcast).

    • Visitor [Join Now]
      Sam [visitor]

      Oh yeah, you’re totally not a CinemaNow marketing rep. Listen, $4 for a new release is ridiculous. That’s why Netflix and Redbox are doing such great business and Blockbuster and Hollywood Video are in such dire straits.

      The low delivery cost of streaming should get companies thinking about making money through low prices and high volume — not desperately clinging to a dying business model. $4 downloads is just the same old crap with a new name.

  5. Visitor [Join Now]
    Aaron [visitor]

    Best Buy has a history of non-commitment — don’t hold your breath that this is around (or relevent) in a year or two.

  6. Member [Join Now]

    If they don’t do the $1 rental, I ain’t looking. I think Blockbuster should be worried, but not RedBox.