Netflix is the king of DVD-by-mail and GameFly has a monopoly on the games-by-mail market, but what will happen if Blockbuster becomes the first to do both? After a moderately successful run with its Blockbuster Online service, the once-dominating brick-and-mortar chain is now working on revolutionizing the online rental industry. Consumer advocacy site The Consumerist reported that some Blockbuster customers have received an e-mail that reads, "In addition to sending your favorite movies by mail, Blockbuster is considering giving Total Access members like you the ability to rent video games by mail for no additional charge." The e-mail then goes on to direct the reader to a survey.
If executed correctly, adding video games to its online catalog could give Blockbuster a significant competitive advantage. At this point, there seems to be no interest from other competitors. "Videogames are a different economic model than movies and TV episodes," said Netflix's VP of corporate communications Steve Swassey in a Consumerist interview. A great movie from 1972 is still a great movie but who wants to play Madden '95?" Netflix has devoted years to perfecting its online DVD service. It seems that the company is just not interested in devoting new resources to tap into uncharted waters. It really has nothing to lose. That is, at least, unless Blockbuster manages to prove that there are enough consumers out there who find significant value in being able to get DVDs and games from one place. It would be interesting to see number of how many people have both a Netflix and a Gamefly account. It's hard to say that adding a new service at no charge will lower the customer base of Blockbuster. The real question is exactly how much value it will add.