hey4ndr3w

Why Netflix Can't Match Blockbuster's Competitive Advantage

Unfortunately, BBI's "competitive advantage" costs them $2 per subscriber per month, according to the company itself. No wonder you don't recommend them as an investment.

The reason is because of their broken distribution model. They have no distribution centers, <i>per se</i>. Each individual store serves as a distribution point. Every location receives a list of films each morning to pick from store shelves and mail to TA subscribers.

This means a) BBI's aggressive program of shutting down stores means that they are also shutting down TA distribution centers; and b) TA subscribers are sharing this shrinking inventory with BBI's walk-in customers. You do not mention the recent and very public problems BBI has had fulfilling on their TA promise as a result of this gerry-rigged distribution model.

Furthermore, you fail utterly to mention NFLX's on-line offering, which seems to compete quite well with Amazon's. Your assertion that Amazon Unbox will doom them is a bit hard to take seriously, particularly in light of other significant details that seem to have escaped your notice.