All this talk about price competiveness and how GZFX should lower their subscription price is predicated on the notion that this is a zero sum game. That a GZFX sub is taking away from a Netflix sub or vice versa. I think this premise is all wrong.
We are dealing with a different slice of the pie than Netflix, BBI, and Walmart. If someone is exclusively interested in renting movies they're going to go with the name brand company. Joe public has no concept of the health of these companies or their current PPS. They don't care about that. What they're interested in most is reliablity and customer satisfaction. Their neighbor talks about NFLX and what a great service it is, so they sign up for what they've heard through word of mouth is the best choice.
We are a niche player. The people that fall into our slice of the pie are those people who have an avid interest gaming, but also like to rent movies,and want the convenience of paying one monthly fee in order to receive a combination of BOTH games and movies. They really don't care that much that Netflix or BBI is a buck or two cheaper, because they want both movies AND games. They're willing to pay the extra $2 for that added benefit. It still works out to be much cheaper than having both a NFLX and a Gamefly account.
I also think there is a fairly large segment of the younger set (20's to early 30's) who are avid gamers, who are also willing to shell out the $222 for the annual plan. This plan gives us not only the comparative advantage, but also the absolute advantage price-wise ($15.85 per month). I'm betting there will be more people signing up for the $222 than most people realize.
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