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Netflix Sues Blockbuster: Is Doing Business By Mail Patentable?Editorial Director, Customer Inter@ction Solutions magazine I'm a Netflix customer — and a happy one at that. I've been using the service for years. I like it because unlike video stores that seem to carry only "American Pie, Cake And Cinnamon Crullers, Part 6: Return Of The Imbeciles" or "Attack Of The Killer Irradiated Chipmunks," (which inexplicably requires several college girls to disrobe during the course of the film), Netflix carries the offbeat stuff I like to watch: documentaries such as "NOVA," or lesser known British costume dramas, for example.
I've recently been working my way through the entire run of the Sci-Fi Channel original series "Farscape." This is not something I'm likely to find at the corner video store. To bring money into the issue, in the video store days, I usually ended up paying far more in late fees than I did for the actual films. And I ALWAYS caved in and bought gourmet jelly beans from the candy dispenser while I was waiting in line to pay.
However, the news that Netflix is suing Blockbuster for copying its "patented" movies-through-the-mail delivery system leaves me a bit perplexed. Patenting the concept of doing business through the U.S. mail seems a bit rich. Netflix is seeking both to halt Blockbuster's service and collect damages. Blockbuster has seen its store rentals declining, due to a combination of factors. The finite amount of films you could keep in a physical store limited what the stores could and could not carry. People like me were tired of paying late fees…if you managed to secure a copy of a new movie on Friday, only to find your friend called and said, "Hey, let's meet for drinks tonight," you had a choice: either return the film without watching it (which means you had to rent it again) or return the film late and pay fees (six of one, half a dozen of the other, as my Mother would say).
Plus, when you live in a city or a crowded suburbia as I do, the time it took to drive to the store, find parking, stand in line, and fight your way across traffic and home could have been better spent (though the jellybeans were a bonus). Belatedly, Blockbuster copied the subscription fee model for its physical stores: keep it out as long as you want, with no late fees, if you paid a flat rate.
That still didn't solve the hassle factor or the limited selection in physical video stores. To stay in business, Blockbuster was literally forced to copy the certainly creative and convenient (put patentable?) Netflix business model. When the Blockbuster model debuted, Netflix realized it would have to compete on price. I actually saw my monthly subscription fee for Netflix drop by a few dollars at that time. Good for customers!
Today, Netflix had five million customers for its service; Blockbuster has two million customers. All I can say to Netflix is, "I'm loyal. I won't depart. But it's no bad thing that you've got competition now. That's the way the marketplace works. Oh, and by the way, when are you going to get Season 4 of the 'Inspector Lynley Mysteries' in? I'm waiting!"
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