netflix redux

Today's New York Times [registration required] has an article about Netflix's long-term viability in the face of increasing competition from Blockbuster and Wal-Mart, both of whom have copied the Netflix mail-order approach to DVD rental.

Even though both these players have massive distribution networks (the most important and costly factor in getting movies shipped quickly), I don't think either brand is well-suited to the mail-order DVD rental business. Blockbuster has alienated millions of customers like me who resent having paid draconian late fees, and Wal-Mart is just another big box retailer who has as much business renting movies as they do selling music downloads or whatever other aspect of our society they are trying to smother under their Bentonville wings.

The big threat to Netflix is Amazon, should they ever decide to jump into this business, since Amazon has serious online cred to go with their monster distribution. And even this is small potatoes compared to what happens if video on demand ever becomes a reality, at which point DVD's themselves go the way of Dodo Birds and VHS tapes. Notice how these lifecycles are continually decreasing?