That bouncing smiley-face thing over at Wal-Mart
According to a Reuters article, the new cost for the three-movies-out-at-one-time option at the company's website is $17.36 per month. The old price was $18.76. This reduction is, of course, not unexpected by the countless observers out there who are having a wonderful time watching competitive capitalism at work.
So, as is obviously evident, Wal-Mart is playing a game of psychology. A mere 13 cents is intended as a moat of value against Blockbuster, and slightly more than a mere 63 pennies is a thumb to the nose at Netflix. In reality, these savings aren't exotically exorbitant and shouldn't necessarily cause an exodus of subscribers from either Blockbuster or Netflix.
But that's how I think. As we all know, there is a large contingent of consumers out there who are very conscious with regard to price. Wal-Mart will surely win a lot of these people over if the company decides to aggressively market its service. Right now, I think Netflix has the upper hand in brand awareness among Net-savvy circles. All of that could change, however, especially as the subscription DVD-by-mail sector grows as a result of all these cost-cutting initiatives.
With the threat of Amazon's
DVDs should, however, continue to thrill the public -- which certainly thrills conglomerates such as Time Warner
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Fool contributor Steven Mallas owns none of the companies mentioned.