Netflix taking Blockbuster to court

Well, you know how we do in America: if ya can't beat 'em, sue 'em. Netflix is taking Blockbuster to court in California over the latter's online movie rental service, which, while suspiciously similar to Netflix, is certainly not the second DVD rental service available to consumers. We're a little perplexed as to why Netflix would only now be taking Blockbuster to court over their business methodology (i.e. their forming a company that does subscription-based online DVD rental by mail) seeking payment for damages and not, say, Wal-Mart (oh yeah, because they already took over Wal-Mart), but something tells us they're not looking for recompense so much as they're looking for Blockbuster to get the hell off their turf.

[torkhum @ Apr 5th 2006 12:33PM]

Blockbuster is still out there? So the $4.99 per movie rental business didn't work -what _Netflix' business model works and growing. Why not move in that direction? Let people rent as many movies as they wish for a fixed price and everyone is happy -oh, no late fees -the big money maker for Blockbuster (in the nineties) -Burn?

[tonydetroit @ Apr 5th 2006 12:40PM]

This is ridiculous. I cannot understand why there can't be competition. Can't two companies compete for the same product/service in this country without getting sued? Who cares who did it first!

[Coasterjob @ Apr 5th 2006 12:42PM]

I have the blockbuster online service and love it...The price is about the same, what you do not get with NEtflix is the free movie coupons...you get two free in-store rentals for free...that alone is worth a few bucks to me...
To BB's defense, they are moving that way....just not as quickly and most people (including me) would like...
They are trying to minimize cannibalization of their store's revenue streams...yet still offer products/services that appeal to a growing percentage of consumers...My industry(not renting movies) is under a very similar dilemma.

[Craig @ Apr 5th 2006 1:01PM]

All consumers should be rooting against this suit. If Netflix wins and Blockbuster exits the biz, Netflix will essentially have a monopoly on a very broadly defined business model. And we all know what monopolies mean for customers -- less service, slower innovation, and higher prices.

[Mojo Yugen @ Apr 5th 2006 1:02PM]

You have to blame the patent office for allowing Netflix to patent the concept of "sticking a DVD in a pre-paid envelope".

[Josh @ Apr 5th 2006 1:10PM]

Dumb Dumb Dumb. Get over the fact that other people will try to enter the same business as you. This is as dumb as saying ebay can't do Buy it now because someone else thought of it.

What if some doctor HAD patented the bypass or kidney transplant. Would other hospitals and doctors be SOL?

[Ryan Waddell @ Apr 5th 2006 1:13PM]

Seriously, the problem here lies squarely with the patent office. If Netflix hadn't patented it first, you can be sure that Blockbuster would have. Stop letting people patent "ideas" and suddenly all these problems go away.

[Woody @ Apr 5th 2006 1:25PM]

I hope Netlix loses. I get more for my money from Blockbuster. An average month with Blockbuster I get about 15 movies, 17 with the 2 free in store rentals. With netflix I was getting an average of 9 movies a month. And I live an hour away from where they were being shipped to and from.

Netlfix need to get their heads out of their @$$es if they want to keep customers, and not try to squeeze every little bit they can out of us.

[boss sauce @ Apr 5th 2006 1:31PM]

Woody, I don't think you were doing Netflix the way it's intended-- the ideas is that they ship it to your home, not an hour away... that sure does thrn the tables as far as laclust, er, blockbuster is concerned. But it sounds like their turnaround wasn't fast enough for you anyway.

[DG @ Apr 5th 2006 1:37PM]

I've actually subscribed to both services and have to say that Blockbuster was way better. Their movies took less time to come, always worked, and I'm pretty sure the service is a coupld of dollars cheaper. Their envelopes are crappier than Netflix's, but that's more their problem than mine.

The best part is that I never had a bad DVD with Blockbuster, while I have had several with Netflix. It sucks watching a movie for an hour and then have it all of a sudden go to crap.

[SmartAlx @ Apr 5th 2006 1:38PM]

torkhum,
Blockbuster (in addition to brick and mortar stores) DOES offer the SAME service as Netflix.

[SmartAlx @ Apr 5th 2006 1:49PM]

Some of you may remember shortly before Blockbuster started this service Netflix increased their prices. They said that they needed to. Pfft... But when Blockbuster entered their market, it didn't take long at all for Netflix to take their prices back down. Now if they win this lawsuit, how long do you think it's going to be before they increase their prices? I give it 6 months or less.

[SmartAlx @ Apr 5th 2006 1:50PM]

Oh, I do note that Netflix offers more movies. And I think that the provide more service features than Blockbuster. But Blockbuster has that free coupon. I like that.

[Mischa Lockton @ Apr 5th 2006 1:53PM]

I think we need to find out more details about what exactly the patent is for. Not the faqct they are online but the specific methods they use... Methinks these sites are a little TOO similar.

Netflix would never gouge the consumer facing VOD.

Stop letting people patent ideas? That's what a patent is!

Now this MAY be kicking a competitor when they are down, but why must innovators let big corporations come in and mimic their developments?

[p-diddy @ Apr 5th 2006 2:16PM]

re: patents and medical procedures, that is exactly why there is law that carves out an exception for doctors:

http://www.physiciansnews.com/law/1097meyers.html

(published 1997)

"A new law exempts medical practitioners from liability for infringement of patents for medical and surgical procedures issued after enactment of the law. Shielded from liability are medical practitioners licensed by a state to provide medical and/or surgical procedures, those acting under the direction of such a person, and health care entities affiliated with such a person, including nursing homes, hospitals, universities, medical schools, health maintenance organizations, group medical practices and medical clinics.

Public Law 104-208, signed by President Clinton on September 30, 1996, denies patent owners the right to enforce patents covering medical or surgical procedures that do not involve patented drugs or devices. Patents on medical and surgical procedures performed on a human body, organ cadaver, or even on an animal used in medical research or instruction relating to the treatment of humans, are now unenforceable."

[Rick @ Apr 5th 2006 2:22PM]

More competition the better. I have Netflix and love it but I don't get the 2 free in-store movie rentals. I was considering switching but realized I hate going into Blockbuster stores. Service generally sucks and they very rarely have what I'm looking for.

[JD Pavkovich @ Apr 5th 2006 2:40PM]

I agree that this is the patents office fault on even allowing something like this to be filed. But I also blame netflix for going through with this. The "let's sue the world" adittude in the corporate environment is only hurting the consumers. I could go on for hours about this one but I won't. I just want to say I've had both services and I too find blockbusters to be better. Rather than suing, netflix needs to concentrate on improving.

[Robbing Ublind @ Apr 5th 2006 2:45PM]

I always thought you couldn't patent an idea. You had to have Blueprints or the like.

So if Papa Johns patents a pizza with spinach and dominoes starts selling one Papa johns can sue?

An idea is just that, more than one person can have one!

[Paul @ Apr 5th 2006 3:02PM]

They both offer something the other doesn't. Blockbuster has a curious habit of censoring some movies. (Watch Scarface from Net and BB back to back). But, Netflix has their artificial "cap" on how many movies a frequent renter can get, by placing them further down on the queue. Bottomline, the market has room for both, so they both should co-exist and let the consumers decide who survives and who doesn't. Not the court system. The patent office is becoming as worthless as, well, most other gov't offices...

[wayshwing @ Apr 5th 2006 3:42PM]

I think all is fair in love and war. If there is a patent, the holder should be allowed to defend it vigorously! Companies spend millions of dollars to patent something (I should know), so if I see someone else infringing on my patent, that I just spent time, money, and sweat to aquire, then (just like anything else I own) I will protect the hell out of it. As much as I value competition, I also value the effort of a company to get something patented - it is NOT easy to get a patent nowadays.
Patents are no longer about ideas anymore - they are capitalist tools used to generate revenue - this is afterall America; land of the dollar and home of capitalist.

[baxter madu @ Apr 5th 2006 3:48PM]

The difference here, unlike the NTP patent trolls, is that Netflix actually made a business about the idea, and at the time was pretty damn nice and innovative. Admit it, all you Blockbuster subscribers love it. Think if Netflix wasn't around, you'd have that?

Blockbuster is basically offering the same service that Netflix actually first produced and patented. Their benefits however (store rentals) are pretty substantial and over time could render Netflix bankrupt. Blockbuster has to, at the very least, pay royalties to them.

Competition is good, and we will all be better off because of it so stop taking sides like little fanboys.

[waggss @ Apr 5th 2006 3:49PM]

If blockbuster was to stop wouldn't that just put Netflix in the driver's seat towards a monopoly?

[chasing @ Apr 5th 2006 5:51PM]

It wasn't solely the idea of the service that they patented, it was the mechanics behind it, including the queue and how it works. They aren't claiming Blockbuster can't be in the internet dvd rental arena, just that they have to use non-patented ideas and technology. Some of the patents are a bit fishy (the idea of them sending you a new movie when you've sent back one you've just watched, for example), but others are understandable (the technology of the queue), if perhaps a bit simplistic. Patents are like that - you have to vigorously defend them. But Blockbuster could probably find ways around it so that any change would be relatively seamless for the customer - if they settle, that is, or lose (which isn't likely).

[Michael @ Apr 5th 2006 11:07PM]

I agree that they would like to eliminate Blockbuster entirely, but I can certainly see why they waited.

Even though they were issued an earlier patent, the all encompassing patent that (they believe) solidifies their case was only issued yesterday. Emboldened by that one, they decided to file the infringement suit against Big Blue.

[Diego @ Apr 6th 2006 9:11AM]

What does this mean for GreenCine?

This looks reactive, like a prelude to a money-grab. NetFlix must be envisioning a not so comfy VOD future.

[BKDotCom @ Apr 6th 2006 10:51AM]

To all you that think the 2/mo instore rentals is great at Blockbuster: You have the option of upgrading (at no cost) to 1/week. The only downside is they also restrict that they must be of the "1 week rental" variety. Not the "2-day rentals". I just get the new releases online and older ones in-store.

[vibexm @ Apr 6th 2006 11:19AM]

I'm a RedBox man, myself. www.redbox.com
Of course, I live in Houston, TX and there is one is every McDonald's near my neigborhood.

[Dan @ Apr 6th 2006 3:17PM]

This is incredibly lame. What's next? Is McDonald's going to patent selling a hamburger patty on a bun via a drive up window and then sue Burger King and Wendy's for patent infringement?

The patent system in the US is broken.

[andy @ Apr 7th 2006 1:18AM]

oh, and also, about blockbuster "censoring" the movies, I don't think they can even do that. The movies are originals. Maybe the fact that they actually have different editions of movies is the reason. Which is a good thing.

[nin @ Apr 11th 2006 2:48AM]

This Netflix "cap" that everyone talks about is weird. I've had them for years now (have about 200 movies in my queue) and do a turn around about every other day, and I've never had a problem getting new releases sent the day of release. I think I've had maybe 3-4 damaged discs in my whole time with Netflxi, but Blockbuster has sent me multiple damaged discs in the span of a couple months.

[Link @ Apr 11th 2006 3:37AM]

I think this whole Netflix thing is a little rediculous. I wholeheartedly agree with Dan. The whole idea behind the suit is rediculous. Is IBM going to start suing AMD because they're making chips using silicone? Or is Re-Max going to make a patent that covers every house that has a front door and start suing every home developer for making homes with a front door? Or will somebody make a patent for making websites using HTML, java, or anything else and sue everybody for using those languages? Come on people, there's a line that you draw for making patent, and obviously Netflix has taken one leap, WAY WAY WAY too far. Netflix needs to fix their own problems before attacking other people.
I recall the time, about 10-15 years ago, when making websites for a living became a really big business. There were web designers making upwards of $100/hr. Now, just imagine, if you will, this same scenario (Netflix vs Blockbuster), but back with the web designers. There would be the first web designer making bank because he was the only one doing it. Then, there would be other, larger companies that did similar things and just adjusted their directions to also make websites. So, the first guy gets mad, sues the companies, and says, "Hey! That's my idea! I did it first!" Rediculous? Yes, I think so.
Oh, and as for the Blockbuster coupons, yes, you can get them 1/week (or 2/every other week) and they can be used for anything in store (and occassionally for games too; which are $8 a piece might I add).

[andy @ Jan 13th 2008 11:21AM]

I used to have Netflix before and through the aforementioned price increase up until blockbuster came up with a better service for $6 cheaper). One of the things that pissed me the most during that time is that Netflix would only carry one version of the DVD. So no Lord of the Rings special extended edition (at that time). They still do the same. No two editions of the same movie. Blockbuster offers most if not all editions of the movie.

Another thing that ticked me off besides the change of price right after Blockbuster came, making me feel cheated for paying the $21 increased just some time before from $18 (blockbuster was $15), was of course the infamous turnaround fraud. While you are doing the Netflix trial they send you the movies REALLY quick. I got all movies the next day, so I was getting 3 movies every 2 days like clockwork. When you start paying... well, you know the story.

Blockbuster is good in this regard. I have watched the first 4 seasons of 24 in just about 5 weeks time. That's about 25 discs.