Site will stop selling discs, detour customers to Amazon
NetFlix.com said Friday it will stop selling DVDs through its Web site and focus more on its core Internet-based rental service. Potential DVD buyers will instead be directed to Amazon.com’s site, as part of a deal with the powerhouse online retailer.
Since its launch in April, Scotts Valley, Calif.-based NetFlix has focused on becoming the leading online rental service for DVDs, offering customers seven-day rentals on more than 2,300 titles through the mail.
Customers had the opportunity to purchase DVD titles outright or after renting them, but with the Amazon deal, NetFlix has opted to drop that service.
“NetFlix.com has chosen to concentrate all of our energies on our core rental customers,” said NetFlix prexy Marc B. Randolph. “We offered both rentals and sales, largely as a service to our customers, but we’ve gotten to the point where we have a successful rental business and have decided to drop our sell-through sales.”
Although he declined to disclose specific figures, Randolph said that while DVD sales have been strong for the company, rentals have greatly outnumbered DVD sales, doubling each month.
As part of the marketing deal, Amazon.com will push NetFlix’s rental services to the leading online book merchant’s 4 million regular customers through “exclusive special offers and promotions” on its Web site. NetFlix will in turn advertise Amazon’s DVD sell-through service.
Amazon.com began selling DVDs in November and music CDs earlier this year.
NetFlix’s move also opens the online DVD retailing market for other merchants, including DVD Empire and DVD Express.
Amazon.com and NetFlix declined to disclose financial details of the deal.