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Investors Deserting Netflix for Blockbuster

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By dmeredit
April 1, 2008

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

Those who know me, know that I have been a long time investor and customer of NFLX. However, I recently re-examined my position and now consider BBI to be a better investment. These are the primary reasons:

1. While NFLX often achieves a 1 day turnaround, sometimes it is 2 days. Can you imagine waiting 2 days for an entertainment option? I can no longer put up with it. After all, I only have a 20 minute drive to my local BBI, which also gives me an opportunity to see different parts of town.

2. $23.99 was my cost for the 4-out plan. Contrast that with only $5.00 for a movie rental from BBI. Potentially I can save almost $18 a month if I only watch one movie.

3. The seemingly endless selection of movies at NFLX can be confusing. Contrast that with the more focused collection at BBI and it is much easier to select from the movies available.

4. BBI has an appreciating asset in their real estate. NFLX has no significant real estate assets to speak of. Assuming we are at the bottom of the real estate bust, this gives plenty of opportunity for BBI to re-mortgage their properties, potentially with a 5-year ARM to lower the upfront payments.

And finally, for those of you who have got this far....Happy April Fools Day.