Sears, Netflix's Newest Competitor

The retailer enters the world of digital entertainment

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Quick, name the first thing that comes to mind when you think of Sears. Shopping malls? Clothing catalogs? The Chicago skyline?

We'll forgive you if "movie rental" didn't come to mind. But that may soon change.

The retail giant has launched an online movie download service called Alphaline Entertainment to compete with Netflix and other rivals like Apple. The service will be powered by Sonic Solutions' RoxioNow platform and will eventually be accessible on a variety of devices, including mobile phones and TVs. Sears, which owns Kmart, will offer its customers TV shows and movies to download, with new movies available on the same day they are released on DVD.

Can the service succeed?

  • I'm Not Sure It Can Compete, says Leena Rao at TechCrunch. She notes that Sears competitors are already wading into the online movies space, with Walmart recently buying a service that streams movies to internet-connected TVs and BestBuy partnering with Sonic to make its movie library available on the web-connected devices it sells. "But when it comes to actual movie rentals from the web," Rao adds, "these companies haven’t been able to compete with giants like Netflix."
  • Sears Will Have a 28-Day Advantage Over Netflix, points out Austin Carr at Fast Company.

Unlike Netflix, which under agreement with movie studios must wait 28 days before offering new releases, non-subscription services like Sears' are not subject to the delay window. Similarly, most films are available day-of release digitally on Comcast, iTunes, and Best Buy's platform CinemaNow. Selling the films is more lucrative for the studios, which would prefer the higher price of a DVD or digital download than the fractionable amount it earns from a Netflix subscription.

Still, that 28-day delay hasn't slowed consumers from flocking to Netflix so far. Its digital offerings have ballooned thanks to aggressive (and expensive) deals with media companies, and have helped to attract millions of new customers and streaming subscribers.

  • Is The Pricing Right? asks Chris Davies at SlashGear. He points to Alphaline's movie rates of $19.99 for new releases and $3.99 for rentals, and explains:

Whether the pricing is still appealing when taken in context of oft-discounted physical media remains to be seen, however. Previous RoxioNow powered stores, such as Best Buy and Walmart’s, have shown themselves to be reluctant to discount any digital content, despite the retailers physical shelves often being filled with cut-price discs. Still, that’s the price of convenience.

This article is from the archive of our partner The Wire.