Coinstar (NASDAQ: CSTR) and Netflix (NASDAQ: NFLX) each offer their users movie and DVD rentals. But the real question is, which company does it better? Coinstar operates pay machines where users can rent movies and then return them easily. Coinstar simply needs to update its machines every time it wants to add new movies, however all of the delivery services are handled essentially by the user. Netflix on the other hand allows its subscribers to download the movies online. It also ships DVDs to those who do not use the online option. The DVD can then be placed back in the mail. Netflix does incur delivery charges however which could grow depending on fuel prices. Its online business does seem to be the best model as the only limiting factor is bandwidth constraints set by the provider. However with the downloadable option, movies can be watched where ever, whenever. The mailing of DVDs is impractical when under time constraints.
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