Wednesday, April 05, 2006

Netflix Sues Blockbuster

When Blockbuster launched its online rental service, I wondered why Netflix didn't sue them since Blockbuster seemed to have copied every aspect of Netflix's business model. They had a monthly subscription fee, they allowed the renters to hold on to movies for an unlimited number of days, they had the concept of a rental queue, etc. But instead of suing them, Netflix went in for a price war.

But 18 months after Blockbuster launched its service, Netflix has sued it for patent infringement. The company is asking for a shutdown of Blockbuster's online service and for damages. Better late than never!

But an analyst says the challenge probably won't be upheld by the court since Netflix is suing so late. There's another interesting line of thought. With Netflix being threatened by video-on-demand through the internet, another article says that the company is just trying to make itself more attractive for a buyout by Amazon (which has already rolled out an online rental service in the UK) before the video-on-demand threat becomes bigger.


At 6:52 PM, Anonymous Anonymous said...

i dont know how the law works in such cases but a patent infringement would be exactly that - an infringement - in spite of the delay in Netflix filing a case, right? even though they mite not be compensated for damages, they mite still be successful in having blockbuster's service shut down...
thaz my take on this...

At 6:43 AM, Anonymous Anonymous said...

Ram and Balaji,
Has netflix patented this Business Model ?? I doubt if they can win the battle considering the fact that business model is a "loose term".

At 12:31 AM, Blogger Balaji said...

ram, i thot so too. but the article says that netflix should've said something when BB first rolled out its service. but since they kept their mouth shut at that time, BB can use that now :)

sriram, the article said they had like 2 patents relating to this business model. but u're right. 'business model' is a rather loose term. and the fact that netflix decided to sue after so long makes me think they have some other idea.

At 3:59 PM, Anonymous Anonymous said...

Yeah Video on Demand is to Videos what Itunes is to Music.

Welcome to this new "Video Era" that we are jumping in ;

B apart of VOD or watch others.

I work with XonDemand providing dvd videos on demand with a pay per view model. DRM is totally the way to protect your content. Pay Per View and video on demand with for adult videos. best, Rob


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