Walmart concedes to the power of the start-up

Walmart isn’t just known for its low prices. The company has a dark side, critics claim, that makes it liable for putting many small business out of business. Nobody can compete with the world’s largest retailer, the theory goes, partly because they pay minimum wage discriminate against women and offer lousy benefits.

Tonight there must be many a party among these critics, as Walmart has ceded the online DVD rental business to Netflix. The retail giant has decided to stop offering DVD rentals by mail for a monthly flat fee and instead recommends current subscribers to use the services of Netflix.

Netflix has been struggling since Walmart launched its DVD rental offering in 2003, and the company still has a long way to go. Blockbuster, the largest movie rental chain in the US, is stil determined to beat Netflix. In response to the Netflix-Walmart pact the company promised a switching bonus of two free months of subscriptions plus a free DVD.

• Tweet  
• Facebook  
•  
•  
• Send to  

• Topics
• Strategy
• Silicon Valley Sleuth