The Video(VHS) Online Purchase Industry

By TeamVHS

(Lauren King, Robin Groce, Jason Knight, Joshua Feira, Yan Gao, Yi-Fan Fang)

Top Five Online VHS Companies

• www.reel.com , www.hollywoodvideo.com– owned by Hollywood Entertainment Inc.

• www.blockbuster.com

• www.bigstar.com

• www.amazon.com

Source: Yahoo.com/Business_and_Economy

Sample Registration Page

Industry Overview

• Consumers enter relevant personal information online

• Consumers can purchase movies anytime, anywhere that they have internet access, while exploring movie reviews and other customer recommendations

Industry Overview

• Customer logs in, selects desired movies, and pays using a credit card

• Movies shipped via shipping service (like UPS/Fedex) to the desired location

• No membership dues or fees required

Sample Order Page

Who Are the Customers?

• Blockbuster targets customers who are high volume movie renters/purchasers (Source: Blockbuster S-4 December 1999)

• Detailed customer information was not available for most online VHS purchase companies in their SEC documents

• Basically anyone with a computer, internet access, a credit card and a VCR

How do they attract customers?

• Competitive pricing (all)

• Direct e-mail marketing(all)

• Discounts/special offers (all)

• Word of mouth (all)

• Reward cards (Blockbuster)• Referrals/gift

incentives(Amazon, Reel)• Name recognition

(Amazon, Blockbuster)

Value Added

• Service & Quality Guarantees (Reel.com)• E-mail notification of new releases and their

descriptions (Blockbuster)• Recommendations and movie reviews

(Blockbuster, Reel.com, Amazon)• Sample video clips (Blockbuster)• Friend lists – allows customers to inform friends

on recent films viewed (Amazon, Blockbuster)

Value Added

• Personalized recommendations based on past purchases (Amazon)

• Free electronic greeting cards (Amazon, Blockbuster)

• Access to online auctions (Amazon)

• Access to movie database (Amazon)

• Movie trivia challenge game (Reel.com)

Value Added

• Movie news and reviews (all)

• Customer wish lists (Amazon)

• Online order status tracking (Reel.com, Amazon)

• Top ten lists (Blockbuster,Reel.com)

• Discussion groups (Amazon)

Customer Retention

• Loyal customer bonuses and discounts (Amazon)

• Customized promotions (BigStar)• Daily specials (BigStar)• High volume rewards program (Blockbuster)• Comprehensive product lines (VHS,DVDs)

ensuring that customers will stay when their video technology changes (all)