GameFly Will Take On Netflix with New Movie Rental Service

Video game rental service GameFly is launching a movie rental service (currently in beta) that aims to compete with the Netflix disc-by-mail business. GameFly will offer DVD and Blu-ray discs to subscribers, with the option of renting one or two movies at a time. While Netflix has predicted that shipping costs would bring an end to its own disc-based rental service, this may not be an issue for GameFly since mail rentals remain its core business.

“We’re viewing this as a test based feedback we’ve received from subscribers who asked for it,” said GameFly CEO Dave Hodess.

“It’s free for now — piggybacking on the company’s existing game distribution network — but Hodess says that GameFly will monitor the test and tweak the program as needed,” reports Engadget, noting an April 4 start date. “While we don’t know how large the company’s film library is just yet, the beta presents an interesting alternative for folks who miss the duality of Blockbuster’s defunct disc service.”

“From a business perspective, it makes a lot of sense that GameFly would want to get into the movie business,” suggests VentureBeat. “Its game rental service has a similar distribution model and already has the warehouse and shipping infrastructure. Also, the major players in the rent-by-mail sector are focusing more on streaming video or are gone (think Blockbuster).”

GameFly could potentially experience backlash from its game subscribers, who have complained in the past that shipping has been slow or the service does not stock enough copies of new releases.

“And those subscribers might wonder why GameFly is jumping into a new rental business without first fixing the core service,” notes VentureBeat.