Run for the hills, Netflix; there are two new video streaming sheriffs in town: Kmart and Sears.
Yes, you read that right. The Sears Holding Corporation, which operates both companies, has started their own video streaming service called Alphaline Entertainment. Unlike Netflix, which offers unlimited downloads for a monthly price, Alphaline will be charging $3.99 to rent a movie, and $19.99 to purchase a new release.
You can check out the service here… oh, wait, you can’t; Alphaline is for U.S. customers only.
It seems Alphaline has a terrible business plan. Why would customers want to pay for each movie rental when they can just pay for a monthly Netflix subscription that lets them watch the movies over and over again, or any number of titles? Besides, if you want to pay for each movie, why not just use the video on demand functions of digital cable or satellite TV? I really don’t get what they hope to accomplish, or how they think they can challenge Netflix with such an antiquated plan; you know, the same one that has Blockbuster going under.
Meanwhile, Netflix is really becoming a company on the move. After the success of Netflix’s roll-out in Canada, the company is going to be spending 2011 working to make their service available in other nations. From the CBC:
“We’re extremely pleased with the reception in Canada and … based on the early success of Netflix.ca we’re going to continue our international expansion next year and we’re going to allocate significant dollars to it.”
CEO Reed Hastings revealed during a recent event that Netflix.ca is on track to be profitable by the time its first anniversary rolls around in September, “which is a very fast break-even,” he said.
Although many consumers continue to gripe about the content selection on Netflix and the lack of newer titles to view, Swasey said customers are appreciating what’s available and generally aren’t cancelling their subscriptions in frustration.
I really doubt that Netflix will have any problems getting traction in other countries. Consumers are raving about it, and governments have to be happy with the way Netflix made an effort to add programming made in Canada, and would likely do the same in the next countries their service becomes available in. They’ve acted in good faith and will probably be welcomed wherever they expand to next.