Netflix sees Amazon entering DVD rentals

Quakester2000

November 3, 2004

heystoopid used our news submit to tell us that Amazon.com looks
set to enter the online DVD rental market to compete with Blockbuster, Wal-Mart
and Netflix. News of Amazons apparent interest in the online DVD rental market
was confirmed yesterday.

The announcement sent the current
market leader Netflix stock tumbling in after hours trading from $17.43 to
$10.99 after the markets closed. Netflix shareholders are obviously worried
about the company going up against Amazon with its powerful buying power
and use economies of scale.

If competition from Blockbuster
and Wal-Mart weren't enough, Netflix's shaky hold on the online DVD rental market is
now being challenged by a more formidable adversary, at least in the world
of e-commerce: Amazon.com.

Rumors of Amazon's entrance into the market were
confirmed yesterday, according to Netflix founder and CEO Reed Hastings,
which caused Netflix's stock to fall in after-hours trading from $17.43 to
$10.99 after the market closed.

Looks like a price war could eventually break out
between the various online DVD rental firms. It may be good for customers but it
most likely wont be good for the smaller dvd rental
companies.

Source: Internet World