UPDATE: Wal-Mart Launches Online DVD Rental15 Oct, 2002 By: Stephanie Prange
Wal-Mart has begun offering DVD rentals through its online site www.walmart.com.
Walmart.com offers unlimited rentals for $18.86 per month “with no late fees,” according to the site, which is offering a trial membership of one month at no charge. Consumers receive and return DVDs through the mail, but are not charged postage.
Customers can receive the first three available titles on their list and can keep the DVDs indefinitely. The service offers more than 12,000 titles according to Wal-Mart spokesperson Cynthia Lin.
The service is in a "test period" before its official launch next year, Lin said. Currently, the test service is available to all who sign up, but the number of subscribers may be capped if the response is "overwhelming," she said.
Wal-Mart's existing facility in Carrollton, Ga., will handle rental fulfillment.
Lin said customer feedback as well as the growth of DVD spawned Wal-Mart's entry into the online DVD rental arena.
The model mirrors that of online DVD rentailer Netflix, which offers DVD rentals at $19.95 per month as well as the first month free deal.
"There are actually a lot of players in the arena," Lin said.
Netflix VP Ted Sarandos said the Wal-Mart move was "no surprise."
"Bring it on," he said about the new competition, adding that Netflix would not match Walmart.com's lower price, but would compete on service.
Netflix has built 180 million individual movie ratings and has numerous fulfillment facilities to Walmart.com's one, he noted.
“Our hub system delivers most of the country in one to two days," he said. "You can't do that with one facility.”
He also welcomed the news as lending credibility to the online rental model. "Every time they write about Wal-Mart, they write about our company," he noted.