I feel like a broken record saying this almost every week, but I have always said this was the wrong way for Blockbuster to play this. Getting movies from either service isn’t about “the wait” for the discs to arrive in the mail. It’s always been about convenience.  Blockbuster’s Total Access service has a couple major flaws if you look at it from a convenience standpoint.
First, if you turn in a DVD at the store to trade in for a free rental, the system doesn’t remove your queued online movie for the one you rented in store, you still must login and remove it from your queue manually. Secondly you then have a movie you have to return to the store and doesn’t that defeat the purpose of having a mailed DVD system in the first place?
The only real benefit Blockbuster has over Netflix is their offering of video games for rent, at least in stores. This is the only reason a friend of mine even has a Blockbuster account (he cancelled his Total Access membership by the way) because he rents video games for his six year old son.
I believe Blockbuster is a dying brand that is attempting to resurrect itself with only moderate success. The stock still can’t find double digits and after the poor last quarter and even worse guidance, why are analysts still pumping this dog?
In the long run I think Netflix comes out on top because of their superior ratings and recommendation system and their speedy delivery service as well as having a trusted brand. With their online movie watching service we may also see Netflix become a trusted source for Hollywood First-Run films. If Netflix really wants to get an edge over Blockbuster they should consider purchasing a company like Gamefly which would allow them to rent Video Games and integrate their ratings and recommendations into that service. Since Netflix is a 1.6 billion dollar company now I don’t even see why this should be a challenge.
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