WAS IT A MOLOTOV-RIBBENTROP PACT…?
Attorney Daniel Becnel asserts that Walmart and Netflix cut a deal to partition the market for DVDs where Netflix gets to maintain its position in the rental market and Walmart maintains its own lucrative position in the sale of DVDs.
From The San Francisco Chronicle:
According to Becnel, Wal-Mart’s presence drove down prices and Netflix suffered reduced profits. Wal-Mart would have suffered, too, if Netflix began selling DVDs, so the companies entered an improper agreement, Becnel says in the lawsuit, which alleges antitrust violations.
When Wal-Mart quit the online DVD rental business, it converted its customers’ accounts to Netflix accounts. Netflix then began promoting Wal-Mart and Walmart.com as places to buy DVDs.
Reads like a win-win right? Tell that to the Polish customers.
Companies at the top of their market don’t believe in competition. Competition costs them the profits that buy them fast cars, big houses and arm candy. If you can’t outright crush the competition, then it is better to come to an understanding where territory, and wealth, is protected.
When it started renting DVDs online in 2003, Wal-Mart charged between $15.54 and $21.94 monthly, depending on how many videos were out at once. Netflix prices ranged between $13.95 and $39.95.
By May 19, 2005, when Wal-Mart left the online DVD rental business, most Wal-Mart customers were paying $12.97 monthly for the right to have two movies at a time while most Netflix customers were paying $17.99 per month for up to three titles.
Netflix currently charges $16.99 monthly for up to three titles — a dollar less than in 2005. Blockbuster charges $19.99 for three rentals at a time in a program that allows exchanges at local stores.
Becnel said the current rates are higher than they would have been if Wal-Mart had remained in the online DVD business.
“Defendants would not have entered into their Market Division Agreement absent an illegal, anticompetitive agreement not to compete,” Becnel’s lawsuit says.
Here in Cleveland Heights — and the rest of Cuyahoga County — Ohio, we enjoy an excellent, if not so convenient, third alternative. We regularly vote support in the form of taxes for our libraries which gives us access to books, periodicals, data bases and, to the point, hundred of thousands of DVDs that we can check out for up to three weeks at a time.
And that neither Walmart nor Netflix can compete against.
Yup – nothing like using tax dollars so people can have free access to the latest hit movies… Who needs to fix potholes when everyone can just sit at home and watch high quality entertainment instead? It’s a great thing that our children have free access to such educational materials – who cares if tax money is wasted on it?
Shalom Bob,
Don’t you just love democracy in action?
We actually get to decide how we spend our tax dollars. Gawd, I love this country.
B’shalom,
Jeff
I love it about as much as Robert loves how the democratic process chooses to spend so much money in relation to the military.
So, i’m confused… this blog seems to be giving two exact opposite opinions on the same thing – Should groups of people be allowed to affiliate themselves with one another in order to decide how much they want to charge others for their collective services?
Shalom Bob,
Good question, one to which the answer is: it depends.
Like war — of which there are just and unjust examples — the entrance into a covenant, a contract in our common parlance, is predicated upon informed consent and equality of position.
Should corporations be allowed to band together in trusts to set prices? A century ago we decided as a nation that that was not a good idea for our future.
Should individuals be allowed to band together to create a level playing field in negotiating the terms of their employment? Again, a century ago we as a nation decided that that that was a good idea for our future.
Life is complex and no individual ever has the single solution. In fact, I fear individuals who say with assurance that they know the answers.
Such is the stuff of fascism. I much prefer individuals who wrestle with questions and admit that their solutions are less than perfect, and subject to change, but that they are the very best they can conceive in the moment given the information at hand.
B’shalom,
Jeff
“I much prefer individuals who wrestle with questions and admit that their solutions are less than perfect, and subject to change, but that they are the very best they can conceive in the moment given the information at hand.”
That sounds like Bush’s post-invasion rationalization for going into Iraq…
Anywhoo, I question if such laws were meant to apply to *everything*, including luxuries or just necessities…
Shalom Bob,
Yeah, but I change my mind, a lot.
The former decider-in-chief called that flip-flopping.
OK, a roof, bread and water qualify as necessities. Where do we go from there?
B’shalom,
Jeff
I’ll give you clothing (basic clothing), electricity/gas,education and transportation (i.e.: roads and the means to use them). That’s a lot of concession from me, as I donlt even really consider electricity to be a necessity – but I’m not so heartless that I expect people to freeze, although it wouldn’t hurt for them to layer on some clothing and turn the heat down a few notches… (unless you’re my wife who doesn’t like me keeping the heat on 68 in the winter…)
[...] WAS IT A MOLOTOV-RIBBENTROP PACT…? Attorney Daniel Becnel asserts that Walmart and Netflix cut a deal to partition the market for DVDs where Netflix gets to maintain its position in the rental market and Walmart maintains its own lucrative position in the sale of DVDs. Keep reading… [...]
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