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Netflix, Inc. (NFLX) Message Board

  • sevejarvis sevejarvis Aug 16, 2002 1:28 PM Flag

    More data on what people will pay...

    ...blockbuster says it serves 3 million people a day. $5 billion in revenue. So, on average every time someone walks into a blockbuster they spend $5. So any "average" person who goes 3X per month, or "heavy user" who goes 1 or 2x per month...is getting a pretty direct economic benefit by using NFLX. Add on the convenience, add on the selection...

    Here's the interesting part: often you make a special trip to blockbuster (that is, you get in your car and drive to this one place just to spend $5). Think of the ratio of travel time & cost to value? ($5)? It's got to be the highest of virtually any shopping trip.

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    • No late fees.

      No need to make a special trip, either way.

      No store hours to worry about.

      Greater selection.

      "According to Adams Media Research, the domestic home video specialty retail industry grew from an estimated $15.3 billion in revenue in 1996 to $20.6 billion in 2001, representing a 6.1% compound annual growth rate, exceeding the 2.5% growth rate of the consumer price index during the same period. Adams Media expects this industry to reach $31.2 billion in revenue by 2010, fueled primarily by DVD penetration. Currently, 90% of all television households own a VCR and approximately 23% own a DVD player. According to Adams Media, the number of households owning DVD players is expected to increase from approximately 24.8 million at the end of 2001 to approximately 90.4 million by 2010. Based on our experience, we believe that for a period of time after a household purchases a DVD player, there is a direct increase in both rentals and purchases."

      source: Movie Gallery's latest prospectus

 
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