June 10, 2003 4:56 PM PDT

Wal-Mart to take on Netflix

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Wal-Mart to throw its weight behind RFID

June 5, 2003
Wal-Mart is taking aim at Netflix's online DVD subscription service with a major public release of its own competitive offering.

The retail behemoth said Tuesday that it has modified its online DVD rental service, which has been in consumer testing since October, by lowering prices, increasing the number of available movie titles and adding distribution centers. The service, called Wal-Mart DVD Rentals, lets people sign up at Walmart.com for one of three movie subscription plans, ranging in price from $15.54 a month to $21.94 a month. Members receive DVDs via postal service, and depending on the program, can keep a number of movies for as long as they like, without late fees or postage fees.

"Based on valuable feedback from our early subscribers, we made significant improvements to our service," Matt Sevick, manager of Wal-Mart DVD Rentals, said in a statement. "We now look forward to letting more customers know about the terrific value, added convenience and deeper selection offered through our online DVD rental service."

Wal-Mart also said it added 1,000 more titles to its list of available DVDs, bringing the total to 13,000. It also opened new distribution centers in California, Georgia, Arkansas, New York and Nevada to speed up delivery times.

Netflix fired back after the announcement, saying it wouldn't take notice until Wal-Mart acquired at least 100,000 members--a fraction of its own 1 million plus subscribers.

"We see this shaping up as a battle for the No. 2 slot though, as neither Blockbuster nor Wal-Mart have had any real traction or impact," said Lynn Brinton, a spokesperson for Netflix. Their offerings "will ultimately benefit both the marketplace and consumers in helping raise awareness of the subscription model."

Wal-Mart, based in Bentonville, Ark., is stepping up its technology efforts in general. The company recently backed wireless inventory tracking equipment called RFID (radio frequency identification) technology, for example.

 

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