Feeds

Wal-Mart cedes DVD rental biz to Netflix for a plug

Dot-com conquers retail giant

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Super, hyper, global, mega store Wal-Mart has given up on renting DVDs via the mail, deciding instead to form a partnership with upstart Netflix.

Wal-Mart will turn over its DVD rental customers to Netflix. In exchange, Netflix will plug DVDs that Wal-Mart has put up for sale on its web site. Existing Wal-Mart customers can become Netflix members at their current monthly rate of $12.97 (for two movies out at a time), if they sign up for a year's worth of the service. Most of Netflix's customers shell out $17.99 per month to have three movies out at a time.

In the requisite shared love quotation, Netflix CEO Reed Hastings said, "This agreement bolsters both Netflix's leadership in DVD movie rentals and Wal-Mart's strong movie sales business, while providing customers even more choices and convenience."

This is surely a blow for Wal-Mart which has tried hard to craft new online markets for selling items such as low-cost Linux PCs and songs. None of these businesses, however, seem to be doing terribly well. In our experience, Wal-Mart's DVD rental service suffered from a lack of efficiency, taking much longer than Netflix to send out new titles.

As word of the deal broke, shares of of Netflix jumped as much as 32 percent in pre-market trading. Investors, however, recoiled a bit after Netflix issued a statement saying the Wal-Mart customer infusion would not have a material impact on its business or subscriber growth.

Netflix ended the day up more than 4 percent at $16.13 - still well off its 52-week high of $36.57.

A number of reports pegged Wal-Mart's DVD rental subscriber count at close to 100,000 people. By contrast, Netflix has close to 3m subscribers.

Shared rival Blockbuster tried to counter Netflix's win by offering a deal to Walmart.com and Netflix subscribers of two free months of rentals and a free DVD if they'll switch stores. ®

Related stories

Movie downloads will be a big business... but for whom?
High Definition and the future of viewing
Amazon UK rents DVDs
TiVo loses its MoJo
Netflix delays UK launch

Choosing a cloud hosting partner with confidence

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.