Netflix vs. Blockbuster: What's the best service for streaming and DVDs?

Watch this: Netflix vs. Blockbuster

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Editors' note (September 19, 2011): Since this story was first published, several important changes have occurred. Netflix has initiated new pricing plans and is spinning off its DVD-by-mail program into a separate company known as Qwikster; Starz content will be disappearing from Netflix streaming as of February 28, 2012; a new Blockbuster subscription streaming service is rumored to be debuting before the end of the year. We'll update this story in the future once the details on these new developments are fully revealed.

There are more choices than ever for your entertainment dollar, but Netflix and Blockbuster remain the only two that offer both online streaming and disc-by-mail options. Recent changes to both--a controversial Netflix price hike and a change of ownership for Blockbuster--make this a perfect time to re-examine how both of these vendors stack up against one another.

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In the analysis below, we explain how Netflix and Blockbuster stack up against each other on both fronts (discs and streaming), look at the other competitors (including Hulu Plus, Amazon, Vudu, and iTunes), and make an overall recommendation on the best choices for you.

Netflix vs. Blockbuster: Disc by mail

The original Netflix business model--the one that put it on the path to take down one-time video-rental king Blockbuster--was delivering DVDs by mail. Netflix innovated in several ways: ordering was done online, monthly subscriptions were flat-rate (keep one to seven DVDs out at a time for a set fee), and--the big one--there were no late fees. Currently, unlimited plans start at $7.99 (one DVD at a time); if you want the option to choose HD Blu-rays, the plan costs $9.99.

Eventually, Blockbuster began offering its own flat-fee disc-by-mail program, Blockbuster Total Access. Now--following Chapter 11 bankruptcy and a sale to satellite provider Dish Network--a reinvigorated Blockbuster actually has some interesting distinctions from Netflix's postal option. As part of the $9.99 plan (one disc at a time), consumers can choose between DVDs, Blu-ray movies, or video game discs. Moreover, Blockbuster lets Total Access subscribers exchange discs in a Blockbuster store, if they'd prefer immediate satisfaction to waiting on the mailman.

Other disc-based options:
Redbox is the original kiosk-based disc rental service. It offers DVD, Blu-ray, and game discs from more than 27,000 kiosks nationwide at prices starting at $1 per night (late fees apply). Visit Redbox.com for more info.

Blockbuster Express is a kiosk-based disc-rental service operated by NCR, and has a totally separate membership and fee structure from Blockbuster stores and Blockbuster Total Access. DVD and Blu-ray discs are available for overnight rentals starting at $1 per night, with pricing ranging to $2.99 to $3.99 for new releases (late fees apply). Visit Blockbusterexpress.com for more info.

There are still plenty of local video rental stores--including Blockbuster Video stores. But most of these still charge by the title and charge late fees--both of which can add up over time.

Many local libraries allow members to check out DVDs for free (late fees often apply, but loan periods are generally longer than one night).

Netflix vs. Blockbuster: Online streaming

In addition to the disc-by-mail programs, both Netflix and Blockbuster offer online streaming services. But they're two very different offerings: Netflix is an "all you can eat" plan that offers thousands of movies and TV shows for a flat monthly rate, whereas Blockbuster is a pay-per-view video-on-demand service (you rent or buy each title individually).

The Netflix streaming plan is $7.99 per month. (As of September 1, 2011, that's $7.99 above and beyond any DVD-by-mail plan--so the minimum streaming plus DVD plan is now $15.98.) For that single fee, Netflix gives subscribers access to thousands of movies and TV shows via a computer Web browser or nearly every Internet-connected home video product available: Blu-ray players and home theater systems, all three major game consoles (Xbox 360, PlayStation 3, Nintendo Wii), most Internet-enabled TVs, newer TiVo DVRs, cheap set-top boxes (Apple TV and Roku), and many handheld and portable products (iPad, iPhone, iPod Touch, Windows 7 phones, and some Android phones).

You can connect multiple devices to one account, and you can jump from device to device, resuming programs exactly where you left off. Many of the devices support HD video (on selected programs) and some offer surround sound.

Because of studio licensing restrictions, the Netflix streaming library is generally composed of older movies. The TV show lineup is broader, but the current seasons of shows are generally excluded. That said, Netflix has lined up some good content deals recently: you'll find a good cross-section of shows from the CBS, NBC, ABC, Fox, and BBC libraries; many Miramax movies; much of the content available on Starz, including recent Disney movies; and the full run of "Mad Men." (Disclaimer: CNET's parent company is CBS.)

Unfortunately, the Starz deal appears to be in jeopardy, with the cable channel publicly saying that it won't be renewing the Netflix deal (which is currently scheduled to end as of February 28, 2012). The bottom line is that content comes and goes from Netflix at regular intervals--don't expect that a movie or TV show you see now will be there forever, and vice versa.

Blockbuster On Demand delivers a totally different take on online video. There's no subscription plan; instead, it's pay-per-view on a title-by-title basis. (Similar services include iTunes, Vudu, CinemaNow, and the PlayStation Network and Microsoft Zune/Xbox 360 online stores; see below for more info.) Titles can be rented (for 24 hours) or purchased (available "in the cloud" for streaming access on compatible devices at any time in the future). (Note: As of September 2, 2011, news has emerged that Blockbuster/Dish may launch a subscription streaming service in the near future. We'll update this story if and when that happens.)

The advantage is that you get access to newer titles, including many (but not all) movies the same day as they hit DVD and Blu-ray. The disadvantage is that the per-title rentals add up quickly; in many cases, the rentals cost $3.99. So, for the price of Netflix's month-long unlimited viewing window (which, admittedly, is older content), you can watch only two movies on Blockbuster. The other content problem with Blockbuster On Demand is that there is little-to-no TV content; Amazon, iTunes, Hulu Plus, and Netflix are all better options if you want to catch up on TV shows.

The other big caveat with Blockbuster On Demand is that it's supported on far fewer devices than Netflix. In addition to streaming to Mac and Windows PC Web browsers, Blockbuster Online is also available on many TiVo DVRs, some Blu-ray players and home theater systems (Samsung, Sharp, Philips, and Toshiba, to name the best-known brands), some connected TVs, and WD TV set-top boxes. Blockbuster streaming is also available on some Android mobile phones and tablets--but, notably, not on the iPad, iPhone, or iPod Touch.

Other streaming options:
As we said above, because Netflix offers a flat-fee, all-you-can-watch plan, it doesn't directly compare with most of the other online video providers. The two closest are:

Hulu Plus: For the same rate as Netflix streaming ($7.99/month), Hulu Plus offers unlimited viewing of many (but not all) current and past episodes of TV shows found on ABC, NBC, and Fox (the co-owners of the service), as well as some other channels, and "hundreds" of movies, including those of the Criterion Collection. According to Hulu, the Hulu Plus service offers more than "1,000 seasons of current and classic shows (comprising more than 33,000 episodes, 16,000 of which are available on all supported devices)."

Unfortunately, there are several caveats. Even though it's a pay service, there are ads on the TV episodes and some movies (though fewer than you'd see on TV). And, confusingly, the shows you have access to aren't the same as what you'll find on the free, browser-based Hulu.com site.

On the positive side, Hulu Plus has excellent device support. In addition to being available on Flash-enabled browsers on Windows PCs and Macs, Hulu Plus is available on the PS3 and Xbox 360 game consoles; most recent Internet-enabled TVs and Blu-ray players from LG, Sony, Panasonic, Samsung, and Haier; TiVo Premiere DVRs; set-top boxes from Roku and Western Digital; and many handheld and portable products (iPad, iPhone, iPod Touch, and some Android phones).

• Sign up for a one-week Hulu Plus trial

Amazon/Amazon Prime: Amazon is alone in straddling the line between pay-per-view video-on-demand and Netflix-style flat-fee viewing. The online uber-retailer offers a comprehensive array of movies and TV shows a la carte--meaning you can rent or purchase digital versions of movies and TV shows, including individual episodes and full seasons in standard or high definition.

In addition, you can also sign up for Amazon Prime for $79/year (which works out to about $6.58 per month--slightly more affordable than Netflix streaming). In addition to providing free two-day delivery for the vast majority of physical items that Amazon sells, Prime members are now eligible for a growing list of unlimited video offerings. (Currently, many of the Amazon Prime offerings are also available on Netflix streaming.)

In addition to streaming to Mac and Windows PC Web browsers, Amazon online video is available on many recent-model connected TVs and Blu-ray players from LG, Panasonic, Samsung, Sony, and Vizio, TiVo DVRs, as well as sub-$100 set-top box units from Logitech (Google TV), Roku, and Sony. See the complete list of devices compatible with Amazon Instant.

• Sign up for a one-month Amazon Prime trial (unlimited videos plus two-day shipping)

Beyond Amazon's unique offering, there is a wide and growing variety of online video providers that offer pay-per-view online video movies and/or TV shows:

Apple iTunes: The iTunes Store is Apple's catch-all online storefront for music, games, movies, and TV shows. Apple's leading hardware position gives it some of the most extensive content deals out there, so you can find a strong list of current TV shows and movies to choose from. Rentals and purchases are supported, and Apple seems to be on a path to transition purchases to its iCloud service (coming fall 2011). You can currently access previously purchased TV shows for on-demand streaming, and movies may soon follow; in the meantime, you're offered streaming rentals and/or purchase downloads. For better or worse, however, viewing options are limited to the Appleverse of products: iTunes software on Windows PCs and Macs; the iPad, iPhone, and iPod Touch; and the Apple TV box, which can be connected only to HDTVs.

• Download iTunes: Windows | Mac

CinemaNow: CinemaNow is the Best Buy-owned streaming-video service. It's also got a wide selection of movies and TV shows for purchase and rental. Device support is currently limited, however: you'll find CinemaNow support on recent Internet-enabled LG, Samsung, Insignia, and Panasonic TVs, Blu-ray players, and Blu-ray home theater systems.

• Check out CinemaNow

Vudu: Vudu is Wal-Mart's answer to iTunes and CinemaNow--and it's pretty good. Vudu offers a strong slate of recent movies and a growing number of TV shows to rent or own. Vudu's big differentiator is its "HDX" video quality, a step up from HD that delivers enhanced resolution (if you've got the bandwidth, and are willing to pay a premium). Vudu offers a 99-cent movie of the day and runs $2 for two nights promos on hundreds of titles at a time (albeit only in standard definition). It's also one of the only online streaming vendors to offer 3D content.

Originally, Vudu support was limited to the company's own proprietary box. However, the company has since been rapidly expanding its availability, and it can now be found on a very wide range of Internet-enabled products. In addition to the PlayStation 3, Vudu is on many TVs (LG, Mitsubishi, Philips, Samsung, Sanyo, Sharp, Toshiba, Vizio); Blu-ray players and home theater systems (the aforementioned brands, plus some Panasonic and Sony models); and the Boxee Box. Vudu is also available through Flash-enabled Web browsers and--with the exception of Disney content--Vudu can also be viewed on the iPad via the company's new Web app.

• Try Vudu for free (one free movie available for first-time users on selected devices)

Additionally, Microsoft and Sony offer pay-per-view movies and TV shows on the Xbox 360 and PlayStation 3, respectively, (in addition to Netflix and Hulu Plus).

Nearly all cable and satellite TV providers offer some movies and TV episodes on-demand at no additional charge (if you're a subscriber), and newer movies on a pay-per-view basis. Furthermore, there is a growing list of "TV Everywhere" iPad and phone apps (HBO Go, DirecTV, Dish Online, TWCable TV, Comcast's Xfinity, and so forth) that provide streaming access to live channels and on-demand content. However, all of these require existing TV service, so they're add-ons, not true viewing alternatives.

What's the best option?

When Netflix had a single $9.99 monthly plan that encompassed unlimited streaming and unlimited DVDs by mail, it was far and away the best deal out there. As of September 1, 2011, however, that deal ends. Netflix customers will need to choose between separate $7.99 per month streaming plans, and disc-by-mail plans that start at $7.99 per month--making the total stream-plus-mail package a minimum of $15.98. That price creeps up if you want to add Blu-ray access or more than one disc out at a time.

As we've outlined above, even with the price hike, Netflix is still a pretty great deal, giving you a best-of-both-worlds scenario (streaming access to thousands of TV shows and older movies, plus DVDs by mail of more recent movies and TV programs). However, it's not the slam-dunk that it was before the price hike.

If you're looking to maximize your entertainment dollar, here's our suggestion:

Best subscription-based streaming option: Netflix
We still find enough TV shows and older movies to make the Netflix $7.99 streaming plan worth the money each month. Hulu Plus and Amazon Prime are both worthwhile alternatives to consider, depending on your viewing habits.

• Start a one-month free Netflix trial

Best disc-by-mail service: Blockbuster or Netflix (tie)
If you're a gamer--or if you live near a participating Blockbuster store and like the idea of the occasional in-store swap--the $9.99 Blockbuster Total Access plan has a slight edge here. If you're content with DVD only, stick with the Netflix $7.99/month plan.

• Sign up for Blockbuster Total Access | Start a one-month free Netflix trial

Best online VOD services: Mix and match
For better or worse, most of the a la carte video services offer a similar movie lineup at nearly identical prices (because the studios and TV networks, not the services themselves, set the prices) and viewing windows. We've had good experiences with Amazon, Vudu, and Apple iTunes. Your choices will vary depending on which service is supported by your viewing hardware, but the good news here (with rentals) is that you can mix and match--for instance, watch movies on Vudu on your Samsung TV, some TV shows on iTunes on your Apple TV, and other TV shows via Amazon on your Panasonic Blu-ray player or Roku. At this point, we'd shy away from buying videos on these services (unless you can find them on "sale" for the same price as a rental, as Amazon sometimes does), because hardware support and usage rights are still in flux.

That said, if you develop a preferred VOD service, make sure that it's supported on new devices (phones, gaming consoles, TVs, disc players) when you're shopping for new gear.

Got a preference on Netflix versus Blockbuster? Or do you prefer Amazon Prime, iTunes, Vudu, or some other video service? Share your thoughts in the comments below.