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Blockbuster and Netflix kiss and make up

The online battle between Blockbuster and Netflix has come to an end. The patent litigation the two companies have been involved in since April 2006 ended yesterday -- details of the settlement are considered confidential.

The dispute sparked when Netflix accused Blockbuster of copying its "method for subscription-based online rental that allows subscribers to keep the DVDs they rent for as long as they wish without incurring any late fees, to obtain new DVDs without incurring additional charges and to prioritize and reprioritize their own personal dynamic queue--of DVDs to be rented."

Blockbuster in turn filed a motion to dismiss the injunction brought forth by Netflix and filed an anti-trust case of its own against Netflix.

"As a result of NetFlix's purported monopolistic conduct, Blockbuster may be forced out of the market, which would cede to Netflix virtually complete control of the online-DVD market," said US District Judge William Alsup in August.

Blockbuster added more fuel to the fire during the 2006 holiday season when it gave Netflix subscribers free rentals in exchange for their tear-off address flaps.

"We want these movie fans to experience getting the movies they want without the wait so they never have to be without a movie, just like Blockbuster Total Access subscribers," said Blockbuster Chairman and CEO John Antioco during the promotion.

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RE: No wait?
By Kuroyama on 6/29/2007 6:40:46 AM , Rating: 2
Netflix is not an online DVD rental service. It is an affordable "unlimited" no-late-fee video service, that happens to use an online interface to keep costs down.

Considering that late fees accounted for around 50% of Blockbuster's profit at one point, the idea that these could be cut out was surprising enough. Delivery of your rentals by mail, and the low priced "unlimited" parts were also likewise new.

Anyways, I wouldn't go so far as to say other companies should be banned, just that I don't like that they waited until Netflix proved that the business model could work, and only then tried to copy it. Blockbuster is perhaps slowly being put out of business by Netflix (good riddance), so certainly they have to do whatever they can to keep on their feet.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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