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NetFlix has found a great niche; allow people to rent DVDs at a set monthly fee; no late fees, no hassle, just movies in the mail. They have been wildly successful, and for good reason. It's a good product at a decent price. I used NetFlix myself last year when I was laid off. Unlimited movies in the mail at a low monthly rate seemed like a good way to pass the time in between job interviews.
The concept behind NetFlix has spun off into a number of similar industries (video games, porn, most anything that could be rented at Blockbuster). The interesting thing about NetFlix is that they acquired a patent on their model:
Posted by Casper at February 20, 2004 01:41 PMIn June 2003, Netflix obtained a patent on a "method and apparatus for renting items." The patent covers "a computer-implemented approach for renting items to customers (in which) customers specify what items to rent using item selection criteria separate from deciding when to receive the specified items." In addition, it covers what it calls a "Max Out" approach, which allows a certain number of items to be rented simultaneously.
If enforced, the patent could conceivably turn all of Netflix's competitors, no matter what they rent, into paying licensees -- or run them out of business entirely.