June 10, 2003, 12:00 AM

Wal-Mart extends online DVD rentals nationwide

For $15.54 to $21.94 a month, customers can rent unlimited videos from WalMart.com with no due dates in a program similar to that pioneered by NetFlix.

Kurt Peters

Executive Editor

 

Wal-Mart Stores Inc. is rolling out online movie rentals through WalMart.com. WalMart.com started testing online DVD rentals from one distribution center last October. It will distribute DVDs from six centers with more to open this year, the company says.

For $15.54 to $21.94 a month, customers can rent unlimited videos from WalMart.com with no due dates in a program similar to that pioneered by NetFlix Inc. For $15.54, customers can rent an unlimited number of movies, with two out at a time. Customers who want to have three movies out at a time will pay $18.76 a month; those who want four, $21.94. NetFlix charges $19.95 a month and allows customers three movies at a time.

Wal-Mart will send DVDs to customers and receive them back via first class mail. It operates distribution centers in existing Wal-Mart facilities in California, Georgia, Arkansas, New York, Nevada, and Indiana. NetFlix operates 20 distribution centers. NetFlix says the opening of additional distribution centers will allow it to provide next day service to 70% of its customers.

Wal-Mart says it stocks 13,000 DVD titles for rental.

NetFlix says it expects to have as many as 1.15 million subscribers by the end of this month, with revenue as high as $64 million for the second quarter. It expects GAAP income of $3 million to $4 million, which will mark its first profitable quarter. NetFlix began offering online movie rentals in San Francisco four years ago. It now claims 4.6% of Bay Area households as customers.

 

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