Hacking Netflix ponders the Netflix & Walmart deal:

I know some people really dislike Walmart for a variety of reasons, but do you dislike them enough to quit? Do you think this will help Netflix? Will it hurt their ability to work with Amazon? Will Walmart buy Netflix?

Quite a few Wal-mart haters in that thread. I’m not a huge Wal-Mart fan either. The stores are big and feel kind of cold to me. Much prefer the local Fred Meyer for both groceries and some other miscellaneous type purchases. I like Best Buy when it comes to retail electronics purchases. Both Fred Meyer and Best Buy have rewards clubs, not sure if Wal-Mart has such an animal (doubt it).

I’ve checked out the Netflix rental price structure several times over the years. Currently 1 DVD at a time with no limit will cost you $9.99 a month. 2 DVDs at a time with no monthly limit is $14.99/month. There are some 40,000 titles in their database.

Doing the math
Let’s say our family wanted to see 10% of the movies in the Netflix database. That brings the 40,000 down to 4,000. How many of these 4,000 DVDs do we already own? My guess is about 10% of that number (400) so that leaves a pool of 3,600 DVDs to rent from.

If our family setup a queue with Netflix and rented say 4 cycles a month of 2 DVDs at a time, that would be 8 DVD rentals a month divided by $14.99. That works out to $1.84 per rental of DVD, not counting the neglible time to drop these off at the post office. We don’t get mail delivered to our home or business on main street. That gives probably 2-3 days of the 7 days each week to watch two movies I haven’t seen.

3600 / 8 = 450 weeks to see all the movies Netflix has in their existing library that I might want to see using 10% ratio of their library. In other words, it wouldn’t happen any time soon. This also doesn’t count new movies that are coming out or an increase in the Netflix inventory.

The reality is that I’m pretty certain we wouldn’t keep up a steady trend of 2 movies a week, so that throws these numbers out the window. We might do that for a couple months, but then I think I’d get tired of the process and a couple rentals a month would end up costing me $14.99 or $17.99 a month.

This is why I’d much rather be able to do this on-demand and skip the whole snail mail routine. Even if it’s 2-3 days (1 business day, they claim) to swap out the movies.

Then again, we’ve never actually tried this out, so maybe I need to quit over-analyzing this and just give the service a one or two month trial to see how it really goes.

Ok, we did just that.

Trying it out
Last Sunday, 5/22/05, at around 6:30pm PST we signed up for the $17.99 plan: three movies at a time. As a family we cycled through the movies and created a queue of over 50 movies. On Monday we received email that our movies would be arriving on or around Wednesday. On Tuesday 5/24/2005 all three showed up. It took us all week to watch two of the three movies, and we only half-watched the third. We plan to have that watched (The Incredibles) and put the other two movies back in the mail on Tuesday 5/31 after the Memorial Day holiday.

My thoughts so far? An average of three DVDs a week will mean that we are paying about $1.49 per movie rental which isn’t too bad. We have to dilligently remember to send back the movies at least once per week, which is something I think we might have a problem doing. I noticed from the mail stamp that the movies are coming from Tacoma which is very close, so I’m curious if the turnaround will continue to be 2-3 business days.

It’s too early to rate the service overall with only one shipment, but we’re going to keep it beyond the free 14 day trial.

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