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Sears/Kmart Movie Streaming Service Apparently Designed For Uninformed Suckers

from the target-marketing dept

Tue, Dec 28th 2010 4:00pm — Mike Masnick

The online movie streaming business is an interesting one, which Netflix currently dominates, though it's definitely still early. While Netflix's solution is far from perfect, there's just something about the way in which Netflix set up its online offering -- where people pay for access, rather than content that has been quite appealing to many people. However, with so much interest in online movie streaming, it's not surprising to see others entering the market, though it appears that many are taking a cargo cult approach to creating online movie streaming services: they just put together a service that offers movies for streaming, without taking the time to understand why they work or what people actually want from them.

A few months back, we wrote about Best Buy's online movie service, called CinemaNow, which is just the branding slapped on a service from a company called Sonic Solutions (somewhat confusingly, Sonic had owned and used the CinemaNow brand, but then sold it to Best Buy, who used it to offer a service powered by Sonic). Rather than following the Netflix online model of paying for access, the Best Buy/Sonic solution followed the old Blockbuster model: pay $15 to "buy" (really license for the life of your account, or until the service shuts down) or $4 to "rent," which would allow you to watch the movie within 30 days -- but once you started it, you would need to finish it within 24 hours. Those "24 hour" windows have been tried before, and they serve no purpose other than to absolutely annoy and piss people off.

In talking to people who follow these services, we've heard that CinemaNow has had dreadful pick-up rates. People just really aren't that interested, and it's not hard to see that services like Netflix appear to be a hell of a lot more user-friendly. Best Buy recently tried to amp up its marketing of the service, and the best argument it can make against Netflix is: "We tell people to think of it like using Netflix, except you get to keep what you actually buy." Except, of course, that's not really accurate, nor compelling. First of all, you don't really get to "keep" what you "buy." In fact, you don't really get to "buy" anything. You just license it, and you lose it the second your account closes (or, again, the service goes out of business). And, of course, with the way the Netflix system works, you have unlimited access to every movie in its system anyway, so you basically get to "keep" all of the movies, anyway (if you define "keep" the same way Best Buy is defining it).

Anyway, the latest on this front is that Sears & Kmart have jumped into the fray with their own service, which appears to be little more than an identical clone to BestBuy's CinemaNow. The Sears/Kmart solution is called Alphaline Entertainment (huh?) and is also powered by Sonic -- but here the prices are actually higher. The faux-own option now costs $20, rather than $15.

So you have a solution that is not compelling, has serious limitations, significantly underperforms the competition and is more expensive than an identical solution from the same core provider. Are Sears & Kmart really saying that their target market is uninformed suckers?

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Filed Under: movies, streaming
Companies: bestbuy, kmart, netflix, sears, sonic solutions

34 Comments

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crade (profile), 28 Dec 2010 @ 3:37pm

My understanding is that netflicks was smart enough to set up a really good deal with the copyright holders because the copyright holders didn't understand the potential behind netflicks and didn't think they would do much with it and now that they understand how big web streaming video is going to be, they aren't to make the same sort of deal with anyone else and everyone else is basically screwed.
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Rose M. Welch (profile), 28 Dec 2010 @ 3:39pm

Are Sears & Kmart really saying that their target market is uninformed suckers?

Sears and Kmart have always had uninformed suckers as their target market. With that in mind, a streaming service aimed at their core market makes sense.
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Anonymous Coward, 28 Dec 2010 @ 4:11pm

Re:
So do you have the Sears or K-mart card?

Higher pricing isn't always an indication that they look at the customers as "uninformed suckers", just perhaps that their business model isn't working from the same base numbers as a Netflix might. There is a question of trust, of long term stability that perhaps these people feel towards a name like Sears.

Further, I would say that without the existing user base and the existing product line that Netflix had before entering into the on demand market, I suspect they wouldn't be doing it for the price point they are on. They are on a very low margin, very high volume business model that few other companies can afford to compete with, at least for now.
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Nastybutler77 (profile), 28 Dec 2010 @ 4:15pm

Re:
My understanding is that netflicks was smart enough to set up a really good deal with the copyright holders because the copyright holders didn't understand the potential behind netflicks and didn't think they would do much with it and now that they understand how big web streaming video is going to be, they aren't to make the same sort of deal with anyone else and everyone else is basically screwed.

Except... most of the major studios have blocked Netflix from renting out new releases for 28 days, and the majority of movies availiable for instant streaming are older and/or flops. So Hollywood has not really done Netflix (and their millions of subscribers) any favors either. Basically we're all screwed, unless we download the movies via bittorrent.
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Wesha (profile), 28 Dec 2010 @ 4:16pm

I have a theory...
Kmart is cursed. It is destined to bleed money and go bankrupt, no matter who buys it.
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ryan anderson, 28 Dec 2010 @ 4:24pm

Re: Re:
the movies offered on netflix not not just old movies and flops. there are a ton of fantastic newer movies along with complete seasons of network and cable television series. however, the greatest thing about netflix has been the movies and documentaries that i have discovered that i would never have taken a chance on if i had to pay for them up front.
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Bryan, 28 Dec 2010 @ 4:34pm

Re: Re:
Which I really did find quite odd when they did that. Netflix has the ability to be the movie industry's goldmine. Maybe not right at this moment in time, but in the future.

I can't shake the feeling that they're once again just playing scared of new technology. They fight torrent sites, yet fail to realize the potential behind them.

It baffles me, it really does.
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Anonymous Coward, 28 Dec 2010 @ 4:36pm

It's funny because it's true
My brother-in-law once worked for Sears as a management trainee. Considering that the Sears management team is a bunch of uninformed suckers, this is not at all surprising. (btw, my brother-in-law quit Sears after they swallowed up Kmart and allowed Kmart's defunct (responsible for running a company into the ground) management team to start making decisions.
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Derek Bredensteiner (profile), 28 Dec 2010 @ 4:46pm

Re: Re: Re:
Netflix has huge value in it's rating and recommendation system. While far from perfect, I've discovered tons of content that way and really enjoyed the results. Props to the variety of content they've added also. I've never failed to find something informative or entertaining to watch, even if the specific title I might seek out isn't available.
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Rose M. Welch (profile), 28 Dec 2010 @ 4:56pm

Re: Re:
There are tons of fantastic movies on Netflix, like the recent Pixar blockbuster Up, just for instance.

Of course, the real awesomeness is in the television shows and the documentaries. I love queuing up shows for my kids, knowing that they'll be commercial-free. Honestly, Netflix is worth it for that alone.
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Rose M. Welch (profile), 28 Dec 2010 @ 4:57pm

Re: Re:
No, I don't have either, I just know that their policies suck, their websites suck, their customer service sucks, many of their products suck, and that tells me that people who still shop there are uninformed suckers.
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j647, 28 Dec 2010 @ 5:26pm

Re: Re: Re:
but what do you really think about it?
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Hephaestus (profile), 28 Dec 2010 @ 5:33pm

Re: Re: Re:
"I can't shake the feeling that they're once again just playing scared of new technology. They fight torrent sites, yet fail to realize the potential behind them.

It baffles me, it really does."

Quarterly profits make you stupid to guy rolling the red bull machine up behind you in the gas station. Who promptly rolls over your foot, makes you hop around and fall into traffic.
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Anonymous Coward, 28 Dec 2010 @ 5:48pm

You get to keep what you bought?

The is the biggest lie of them all.

In this day and age anyone who says he bought a movie is either ignorant of the law or is trying to shag your sis.

There are some people out there that believes ownership only apply to them and not others(looking at you RIAA, MPAA, Bono, ASCAP and company).

When a bozo tells you that you buy some IP thingy ask him if you can copy freely or distribute it to your friends?

Either he call you a thief and freeloader or he will lie saying you can.
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Travicane, 28 Dec 2010 @ 5:48pm

Re: I have a theory...
You got it wrong -- KMART bought Sears. The result was to replace many local KMART stores with "Sears Essentials", a bastard son with bad genes from both sides of this shotgun marriage.
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Dave (profile), 28 Dec 2010 @ 5:54pm

Who buys from these services?
I don't get why anyone who wants to own a movie would buy from a service like CinemaNow. It's practically the same price as a Blu-ray or DVD disc, but with far less overall value and no first-sale rights. These services would be fine for PPV -- $3 to $5 has been a pretty steady price for movie rentals over the years -- but for ownership? Really?

Then again, if more customers made educated decisions, a lot of people would be out of business, wouldn't they?
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Rose M. Welch (profile), 28 Dec 2010 @ 6:17pm

Re: Re: Re: Re:
I think they're the best stores evar. :P
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Rose M. Welch (profile), 28 Dec 2010 @ 6:17pm

Re: Re: Re: Re:
LOL, no, really, I haven't shopped there in ages because of their crappy customer service, but there's not a week that goes by that I don't read a 'Sears screwed me over.' or a 'Sears won't let me purchase items.' story on the Internet.
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Steve R. (profile), 28 Dec 2010 @ 7:55pm

Re: It's funny because it's true
You have it backwards. K-Mart "bought" (merged) with Sears.

Do you know what is really appalling. Kmart goes bankrupt, comes out of bankruptcy and is then able to "buy" Sears!!!!! Someone was playing a financial game. To bad there was no smoking gun that I know of. I suspect this would make for a really good story for an investigative reporter. Hint Hint Hint.
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robin, 28 Dec 2010 @ 7:56pm

Never Underestimate
was it p.t. barnum (correct me if i'm remembering wrong) who once said:

no one ever went broke underestimating the stupidity of the american public
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Bengie, 28 Dec 2010 @ 8:57pm

Lawl
I can rent a new release movie locally for $2 and bring it home to rip and watch in full HD quality.

Why would I pay twice as much for a lower quality streamed version?

P.S. I haven't ripped any rented videos, but I could if I wanted and I have that option with rented.
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theorangebox, 28 Dec 2010 @ 9:48pm

cimema-not!
@ words,
Bit - torrent
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ervserver (profile), 28 Dec 2010 @ 11:00pm

Sears
the previous post commenting how people have trust in the name Sears is dead on. They will never have a huge customer base for their movie rentals but have some paying a higher fee allowing them to make a few bucks.
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btrussell (profile), 29 Dec 2010 @ 2:34am

Re: Re: Re: Re: Re:
I've never had a problem with Sears.
Not even for returning a vacuum, which didn't suck either.
:>)
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Karl (profile), 29 Dec 2010 @ 6:29am

Re: Who buys from these services?
It's practically the same price as a Blu-ray or DVD disc, but with far less overall value and no first-sale rights.

I was about to say that. For $20, you could just buy a physical copy. One that wouldn't stop playing if you stopped paying Sears, and that you could re-sell if you were broke.
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Marcus Carab (profile), 29 Dec 2010 @ 7:16am

Re: Never Underestimate
Apparently it was Henry Mencken, but what a terrible quote! I looked it up and you have it right, but it doesn't make any sense - not if the goal is to call the public stupid anyway. It should be "overestimating" should it not? Or else change "stupidity" to "intelligence"?

As it's currently worded it seems to say that it IS wise to assume the american public is smart and informed.
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Anonymous Coward, 29 Dec 2010 @ 8:29am

Re: Re: Never Underestimate
in the sense that if you estimate that SOME people are stupid enough to buy your crappy product and make you a profit. Then you find that you underestimated the stupidity of the people and EVERYONE bought your crappy product making you rich, it makes perfect sense.
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Anonymous Coward, 29 Dec 2010 @ 10:21am

Re: Re: Re:
You are confusing your personal opinion with the opinion of the populace at large. If Sears truly sucked as badly as you indicate, they would have gone out of business a long time ago. That they are still in business indicated that they don't suck for some people some of the time.

The people who shop there may be uninformed suckers, or they may be people who value a long term relationship with a reliable source over "this week's new company". It is the same uninformed suckers who pay a couple of dollars more for something from a local store instead of driving out to Sam's Club to save some money.

They aren't suckers, they are people making an informed choice. I hope that your children get to learn the difference between Mom's opinion and fact. :)
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Almost Anonymous (profile), 29 Dec 2010 @ 10:29am

Re: Re: Re: Re:
Today's Surreal Internet Moment brought to you by: Hephaestus! Unfortunately, due to shortages, I have no internets to offer as a prize.
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Marcus Carab (profile), 29 Dec 2010 @ 10:45am

Re: Re: Re: Never Underestimate
Ah yes, I guess I can see it that way. Still feels like it robs the quote of a lot of impact.
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John D. (profile), 29 Dec 2010 @ 11:01am

Re: You get the customers you deserve
I was forced out of my job as an appliance salesperson at Kmart a few months ago. To add insult to injury, the company contested my unemployment, and got me denied benefits (this, after I was already receiving partial benefits because of their last hours cuts). Any business that mistreats employees and customers as badly as Sears/Kmart does (man, could I tell you stories), has to aim at the suckers. The suckers are all they have left. Oh, and the people who don't or can't read labels (did you know most of the Craftsman line is now made in China?).
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Nastybutler77 (profile), 29 Dec 2010 @ 11:39am

Re: Re: Re:
There are tons of fantastic movies on Netflix, like the recent Pixar blockbuster Up, just for instance.

Notice I said "the majority." You named one of the exceptions.

While some of the TV shows are nice, the "best" TV shows (i.e. Mad Men, Breaking Bad, etc.) are only availiable via DVD or BluRay.

Just because you like the crap they stream doesn't mean everyone does. :P
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dullgeek (profile), 29 Dec 2010 @ 12:09pm

Re: Who buys from these services?
I just recently rented a Elf from Amazon. It was on special for the holidays for $0.99. I viewed it through my TiVo.

It's not obvious to me that Netflix will necessarily prevail in it's model for online streaming. Personally I just think that CinemaNow has the pricing wrong. If anything, RedBox has demonstrated that the value of a movie rental is about a $1. So $4 is too high.

The success of RedBox should give the movie industry something to think about. Streaming is dramatically cheaper to operate. Which means that they could get much better profit margins due to the lower capital costs.

And IMHO, they could effectively use the same model as RedBox. I would almost certainly drop Netflix (which is also available on my TiVo) if I had access to any movie for $1 per rental rather than the limited selection at NetFlix. I don't watch 10 movies per month, so $1 per rental would be cheaper. Also, even if I were to exceed that $10 expense in a given month, the value of much greater selection would be worth it.

So I can see a market for the CinemaNow model. They just have to get the prices right.
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Nastybutler77 (profile), 29 Dec 2010 @ 2:06pm

Re: Re: Re: Re:
P.S. I'm a Netflix subscriber, but in case you couldn't tell, I rarely stream video.
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