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Target Isn't Gunning for Netflix

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Netflix (NASDAQ: NFLX  ) may have the video streaming market all but cornered, but that isn't stopping new players from giving it a shot.

Target (NYSE: TGT  ) is the latest company to throw its hat into the digital market. The cheap-chic retailer rolled out Target Ticket this week, offering a digital catalog that initially consists of 30,000 movies and TV shows. 

Target has a clever hook to get folks to sign up, promising 10 free flicks via the UltraViolet streaming platform. There's a catch, of course. It's not just any 10 digital releases. Target makes viewers choose from 25 older movies including Space Jam, Ghost, and Crocodile Dundee.

The 10 selections are perfectly free, but Target still requires your billing information to complete the transaction. This is Target being clever again. Folks registering for the freebies are now thrust into Target's ecosystem.

The bad news for those scouring for a Netflix alternative is that Target Ticket isn't a streaming smorgasbord. It's a garden variety on-demand service offering digital rentals and purchases along the lines of iTunes and Wal-Mart's (NYSE: WMT  ) Vudu.

Sure, if Wal-Mart's doing on-demand, it makes perfect sense for Target to follow the same playbook. You can't have the magnet of young cost-conscious shoppers lose digital ground to the world's largest retailer. 

It also would have been tough to take on Netflix. As everyone short of Amazon.com (NASDAQ: AMZN  ) has conceded, this isn't a game that anyone can win. With Netflix spending $2 billion a year on content, the moat is ridiculous. The path to match Netflix's 36.3 million streaming customers would prove rocky.

Amazon's been able to dabble in both arenas -- offering the "all you can stream" catalog that takes on Netflix with the piecemeal rentals to challenge iTunes, Vudu, and now Target Ticket -- but it's hard to find another company that crazy. Amazon's merely supporting its devices.

The challenge for Target, naturally, is to see what it can do for an encore. There will be a lot of people that sign up just to get the 10 free titles. You don't look a gift digital copy of Office Space, Independence Day, or Mars Attacks in the mouth. The videos will be playable across iOS and Android devices as well as through some Web-tethered gadgets, and freeloaders will grow to embrace the convenience of the service. That may or may not be enough to make Target Ticket a major player, but at least the company knows how to make an entrance.

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Rick Munarriz
TMFBreakerRick

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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Related Tickers

7/2/2015 3:59 PM
NFLX $658.31 Up +2.86 +0.44%
Netflix CAPS Rating: **
TGT $82.27 Down -0.72 -0.87%
Target CAPS Rating: ***
AMZN $437.71 Up +0.32 +0.07%
Amazon.com CAPS Rating: ***
WMT $71.86 Down -0.02 -0.03%
Wal-Mart Stores CAPS Rating: ***

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