Blockbuster Tells Netflix to Shove It

April 06, 2006 | by Nino Marchetti

Things heat up between rival online video rental services as Blockbuster publicly condemns a Netflix lawsuit over key patents, calling it without merit and promising to defeat it.

Blockbuster defended itself today against claims it is infringing on key patents rival online video rental service Netflix owns regarding "a computer-implemented method for renting moves to customers", calling a lawsuit filed by Netflix Tuesday without merit.
 
In an 8-K filing with the Securities and Exchange Commission, Blockbuster said their Blockbuster Online service has a right to be in existence and that they will "defend itself vigorously" against a lawsuit filed by Netflix in a California federal court. Blockbuster even went so far as to say they see this lawsuit as an attempt by their competitor to force them from the marketplace without letting consumers decide.
 
"We believe this lawsuit is an attempt by Netflix to stifle competition and, as a result, reduce consumer choice," said Shane Evangelist, senior vice president and general manager for Blockbuster Online, in a statement. "The timing of this lawsuit appears to confirm that Blockbuster Online has emerged as a real competitive force in the online rental industry. Apparently Netflix would prefer to take us on in the courts rather than facing us in the marketplace where the consumer is the judge."

Post Your Comment...Comments

Scott V. on Apr 6th, 2006 at 1:40 PM:

Burn Blockbuster, burn!!

Scott V. is a homo on Apr 6th, 2006 at 2:04 PM:

Why? Because they've survived in the video-rental marketplace for 20+ years (1985) and wrote the book on how to make money in the industry?

But hey... what do I know.
Scott V.'s biggest fan.

Scott V. on Apr 6th, 2006 at 2:57 PM:

Hell even Hollywood video didnt want to sell to them. Nothing like having collections come after you for a $3 late fee!!

Isaac Hartman on Apr 6th, 2006 at 4:53 PM:

I thought the customers did decide. When Netflix came up with a better model for renting DVDs through the mail, Blockbuster was hurting financially when their customers abandoned them. Solution, they copied a great idea without regards to patents. Voila, they're getting sued. Maybe if they had added something unique to their service they might have a case. Plus Netflix is not owned by a Mormon corporation that edits movies to fit their moral profile. (i.e. the first ten minutes of "The Bad Lieutenant" was completely removed, destroying the plot-line and any explanation of what the story was about.) I'll take my entertainment un-filtered thank you.

Wayne B on Apr 6th, 2006 at 4:55 PM:

"Why? Because they've survived in the video-rental marketplace for 20+ years"

No, because they are a greedy underhanded corporation, they type that would pull your shirt over your head and punch you in the gut if they thought they could make money that way.

The type that would keep old movies in the "New Releases" section so they could continue to charge outrageous prices for rentals and charge ridiculous late fees.

The kind that would lobby our government to get the laws re-made to fit their purposes.

Aren't you glad you're associated with them?

Jeff F. Santa Barbara on Apr 6th, 2006 at 4:58 PM:

I agree with Scott V. - Blockbuster put a mark on my credit report from a collection agency becuase they had an accounting error. When my CC expired they sent any late fees to collections instead of billing my new card which they demanded in the store, with out informing me. Astonished when I saw my credit report, called Ballbuster Video and they made their mistake a complete nightmare for me to fix. About 2 hours of my time and no less then 8 phone calls later they eventually corrected THEIR MISTAKE - thanks BALLBUSTER VIDEO!

Arnaud on Apr 6th, 2006 at 5:47 PM:

Isaac, do you have any info regarding this "Mormon corporation" and this "Bad Lieutenant" thing? From what I know, Netflix does not edit the content on DVDs.

John Q on Apr 6th, 2006 at 6:06 PM:

"We believe this lawsuit is an attempt by Netflix to stifle competition ..."

I don't think so. Competition is good. It's bad when blockbuster has to use somebody's key patents to compete. It's like grabbing someone's hand and using it to beat them up.
Blockbuster is a big company with plenty of resources. Couldn't they come up with a better online video rental service than Netflix? Is Netflix's way the best and there's no other way? Time to think outside the box!

Note: Maybe Blockbuster outsourced their R&D, if that's the case, they're screwed! It's time to pirate somebody else's idea huh?

BluRay on Apr 6th, 2006 at 6:33 PM:

I believe the Netflix suit should be tossed aside like week old lettuce. Did you read WHY Netflix is suing Blockbuster? Whew! Lawyers are a drag on our economy and would be better used as landfill for the new San Diego airport.

David Cross on Apr 6th, 2006 at 6:44 PM:

Interesting comments, but what you're all forgetting is that it's just movies, which you can pirate for free.

JBO on Apr 6th, 2006 at 7:10 PM:

I will admit Blockbuster used to be the bane of the video rental service industry with their insane late fees and high prices. Netflix came and brought a new method of service which forced Blockbuster to compete more aggressively by ditching fees and offering their own online service. Personally today Blockbuster has an edge with their offer of in store rentals along with the online mailers.

This lawsuit can do no good for consumers. As we can hurting BB can only stifle competition. I do not believe this lawsuit will hold up. Patents are out of control, and I hope the judge uses this case to help set a predicent for the endless frivilous patents and lawsuits going on.

Online downloads of movies are just coming about and the initial introduction sucked. The DVD mailers right now are the best bang for the buck. Letting the two big players stay competitive is good for us. If Netflix wins, they own the DVD monopoly giving us crappy DRM'd files to watch/purchase at sick prices.

BuBBy THE Barbarian on Apr 6th, 2006 at 7:21 PM:

Blockbuster is the absolute worst video place on this and any other planet.

After using Netflix at least as long as I had a BlockBuster membership the only negative I can say is their service is just too freaking awesome! Dang movies come faster than I can watch them. I love you Netflix. I love you.

Screw BlockBuster and their ripoff clone service. Freaking Netflix invented the thing, they come along and simply copy it? No.

Paul S on Apr 7th, 2006 at 12:43 AM:

So when it says:

"a computer-implemented method for renting moves to customers"

Does that mean they're now going to go after every online movie rental site on the planet? I use lovefilm.com in the UK, it's an online rental so why aren't they being sued?

leon on Apr 7th, 2006 at 1:22 AM:

Arnaud he said BB was the one editing the movies.

Netfix on Apr 7th, 2006 at 8:54 AM:

Blockbuster will be gone in two years, get used to it.

They haven't changed their brick n mortar buisness at all. Big banner ads that state "NO MORE LATE FEES", oh but did we mention the new "restocking fees" rofl

If you love BBV you are in the minority. Netflix invented the new business model and I hope they win their suit. No need to delay BBV's demise.

willgonz on Apr 7th, 2006 at 10:36 AM:

Netflix trying to Patent Internet rentals, is like McDonalds trying to patent the drive thru.

I like Blockbuster because you get monthly free in store rentals. Some times you have to have it right now.

BB deceptive advertising on Apr 12th, 2006 at 9:13 AM:

Despite Blockbuster's boldly advertised "No Late Fees", many stores still charge late fees without clearly disclosing they do not follow the "No More Late Fees" policy. I was recently charged $19.47 in late fees in addition to initial rental fees after returning 2 videos within a week. Blockbuster has already been sued by the Attorney General in New Jersey for fraud and deceptive advertising, and there is another case pending in Texas. It's sad that Blockbuster is so desperatley and unfairly money-grabbing. I'm thrilled Net Flix came along.

Jules on Apr 23rd, 2006 at 10:59 PM:

Yes, restocking fees are BS, but you would only be charged the selling price of the movie if you returned it over 40 days past the original due date, so um, get your crap together. Also, you can't patent an idea as wide spread as online DVD rentals. If you could, then Blockbuster/Hollywood shouldn't exist in the first place, because places like Mr. Movies were renting out videos first. It's called competition. The drive through example is spot on.
Blockbuster doesn't censor their movies, they carry different versions. I agree that that's crap, because people need to not be so uptight, but it would be even worse if they edited them or whatever.
I have tried both Blockbuster online and Netflix and I've gotten better service from Netflix. So it's stupid to have this BS lawsuit, you're already better! Don't abuse the legal system!
And for those of you complaining about a collections agency coming after you for $3, how about you just keep track of who you owe money to and pay it in the first place? I mean, the company is totally wasting its money going after you, but don't complain because you decided not to pay 3 freakin dollars.
Oh, and about keeping movies new releases forever, they sure do that, but all rentals cost the same price unless its a privately owned Blockbuster. in which case it'd be the private owner, not the corporation anyway.

XMinusX on Apr 25th, 2006 at 9:39 AM:

To my knowledge of ecconomics ,If Netflix has 80% of the mail order Rentail buisness .Then Its a monoply .So it needs to branch off and make a new buisness and compete with it's self or let other companies join the bandwagon.
pluse why is BlockBuster getting hit .if you look below to the sponser there's a hand full of online rental sites.

Jenna on Apr 29th, 2006 at 8:04 AM:


RE:
David Cross on Apr 6th, 2006 at 6:44 PM

"Interesting comments, but what you're all forgetting is that it's just movies, which you can pirate for free."


Being an employee of Blockbuster, I agree about the "just movies part". don't forget you can also get arrested for piracy. Hence the "Anti-Piracy Warnings" on movies smartguy.

Jenna on Apr 29th, 2006 at 8:08 AM:

Thank you Jules! I so agree with you on this whole fiasco!

Brian Mac Ian on May 2nd, 2006 at 4:38 PM:

If BlockBuster had any brains, they would've hired an advertising firm, requiring that the ad go something like this:

A phone rings at a man's desk at work. He picks it up and it is his wife. She says "Hey Honey! Let's get a movie tonight! I really want to see "The Godfather" or some other classic mobster movie!" He says "Yeah, I wanna watch something too. But that's why I got a membership to WebVids, so we could get however many we want, whatever we want, whenever we want..." She says "But Honey, we don't have any mobster movies at home. Just "Seinfeld" episodes, "Office Space" and "Dead Men Don't Wear Plaid." He says "Well, isn't 'Dead Men Don't Wear Plaid' close enough?" "'Close enough?'" she says. "'Close enough.' Hmmm. Well, what do you want for dinner tonight?" "Oohh! I'd love that red beans and rice dish you make so well! Mmmmm!, " he says. "Well," she says "we only have some leftover Chinese from this weekend. But that's 'close enough' isn't it? Oh! I know! We can watch it over "Dead Men Don't Wear Plaid. See you when you get home." Sound of phone hanging up.

Close up of husband wincing. Sound of muted trumpet going "Wamp-wamp-wamp-wamp-WAAAAAMMMP!"

How many of us have found ourselves in this position? Anybody who knows EXACTLY what they want to watch a week, a month, two months, a year in advance is obviously a pure film consumer and not one who enjoys and savors particular attributes of a mood and/or movie itself. But yes, I am a Netflix customer and do enjoy it for what it's worth.

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