Online DVD Rentals

Blockbuster vs. Netflix

Online DVD rentals are convenient and simple. You order DVDs (or Blu-ray discs) online by creating a list of choices; the rental company then sends the titles on your list by U.S. mail. Prepaid return mailers are included. There are no late fees. When you send back the DVDs, the company sends out another title on your list.

Netflix (*est. $5 to $60 per month) offers about 100,000 titles at last count, which is roughly 10,000 more than Blockbuster Online (*est. $4 to $35 per month) has available. Netflix has a larger network of distribution sites, which means movies have a better chance of reaching you in a day or two. However, Blockbuster Online offers the unique option of returning the DVD to a store, which can shorten the wait for the next DVD because the store clerk will log your return, and your next DVD will automatically ship. Some Blockbuster Online plans allow renters to obtain a DVD from store inventory instead of by mail when they return a disc. Some plans cap the number of discs a renter can get from the store per month; with others there are unlimited free in-store exchanges. However, all plans with in-store exchanges cost more -- sometimes substantially more -- than mail-only plans. Both Netflix and Blockbuster are making major efforts to grab a piece of the growing movie download market. We'll discuss that when we focus more squarely on movie downloads later in this report.

Although both companies get generally high marks for customer service, we do see a few complaints as well. In 2006, Netflix settled a class-action lawsuit without admitting wrongdoing over allegations of "throttling" -- giving priority on hot titles to new customers and infrequent renters, essentially penalizing those that use the service most heavily. Netflix's terms of use now specify that the company gives allocation priority to those who rent the fewest DVDs. Blockbuster Online's terms and conditions state that it also determines allocation priority by "various factors," including a customer's history of use. In 2005, Blockbuster settled a lawsuit accusing it of deceptive advertising over a marketing campaign that promised no late fees. There currently are no late fees for online DVD rentals for customers of either service. That also holds true for in-store exchanges done under the terms of Blockbuster's online plans, but not for other in-store rentals. These policies apply to Blockbuster's company-owned stores but can vary in franchise stores, which the company says makes up about 15 percent of the total.

Both online DVD rental services offer several subscription plans. The cheapest plans stipulate that you may rent one movie at a time with a maximum of two per month. Unlimited plans for Netflix start at $8 per month, and at $9 per month at Blockbuster. More expensive plans allow you to rent more than one movie at a time. As noted earlier, Netflix also adds a surcharge of between $1 and $9 if you have access to Blu-ray discs on your account.

Once you return a movie, the service sends you the next available title in your preference queue. Neither Blockbuster Online nor Netflix allows you to rent a single movie -- you have to get a subscription (though you can rent single movies at Blockbuster's brick and mortar stores). Neither service offers adult movies.

Most expert and user opinions give Netflix the edge over Blockbuster. Reasons cited include Netflix's larger number of distribution centers, which increases the likelihood of getting a disc by mail in just a day or two. Netflix's edge in terms of titles is another plus, and some appreciate the inclusion of free streaming video. Blockbuster is also a little more expensive, especially for non-Blu-ray users. In a small sampling of readers asked which service they liked better by EngadgetHD, most give Netflix the edge, but some Blockbuster Online users -- particularly those near a Blockbuster store -- do give that service a thumbs-up.