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April 7, 2006
Startups Do Sue Big Players
Posted by Alan Wexelblat
Interesting to think about this suit in light of the Graham essay: Netflix and Blockbuster Online. Although the company has been around for years (since 1997 according to its site), Netflix is still by far junior to the long-established video chain. In the online business Netflix has something like a 3:1 subscriber advantage over Blockbuster's relatively new service.
So how do we read this suit? Graham would appear to side with Blockbuster, which claims the suit is not about intellectual property but instead about market competition and Netflix feeling the heat. I tend to think that's right, though it's bigger than that. Netflix has to realize that if Blockbuster Online looks to go into the black (predicted for next year) then it's going to be open season and everyone with an inventory of disks and a big name (like, say, the studio chains) will want to get into this business. Patents or no, that's going to cut severely into Netflix's profit margins. On the other hand, if they succesfully shoot the first trespasser the others will think twice before getting into the business.
Comments (5)
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1. Stephanie on April 9, 2006 5:21 AM writes...
Basing the claim on when a company was wround then yea Blockbuster but did Blockbuster think about and try to run with the idea before Netflix was operating should be the real question asked.
Permalink to Comment2. Sad on April 9, 2006 5:48 AM writes...
Offtopic but...
Let's all observe a moment of silence for www.freedom-to-tinker.com. Last night, without any advance notice, they quietly shut off the server and unregistered the domain name, which, this am, no longer resolves.
I guess the forces of darkness (DRM, SunComm, Sony, et al.) won another battle.
Let's mourn briefly, and then ensure these forces lose the war.
Permalink to Comment3. drwex on April 11, 2006 8:50 AM writes...
Eh? http://www.freedom-to-tinker.com/ resolves just fine for me, with a top entry of "Understanding the Newts" dated April 10. Anyone see something different?
Permalink to Comment4. Sad on April 12, 2006 10:04 AM writes...
Hrm. You're right. Why was their domain name nonexistent for just a few days? Usually a domain name is good as long as the site is still alive, even if the server is down. Maybe they were late paying to renew it?
Permalink to Comment5. Sad on April 13, 2006 7:24 AM writes...
Please be more specific. What is good? The post? One of the comments? Which comment?
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