Musicland and NetFlix Pair Up to Push DVDs

Musicland Stores Corp. and NetFlix.com began a cross-promotion program yesterday with links on NetFlix.com and Musicland’s SamGoody.com retail site. The partnership is designed to promote awareness and sales of the digital versatile disc (DVD).

DVDs are about the size of music compact discs, but carry movies and other video and audio content. The two companies are hoping that their joint effort will help grow the overall DVD market, which has seen slow growth in part because DVDs cannot be viewed on traditional VCR machines.

Multiple Promotions

NetFlix.com, an online DVD rental site, will point customers to SamGoody.com when they want to buy discs. SamGoody.com will provide the purchase phase of NetFlix.com’s “Test Drive” program, which allows customers to view movies on DVD before deciding whether to buy the disc.

In return, all of Musicland’s retail stores — Sam Goody, Suncoast, Media Play and On Cue — will offer DVD promotions in conjunction with NetFlix.com, including one free rental from NetFlix with every DVD customers buy at the retail stores. NetFlix.com will also provide coupons good for $2.49 to $3.49 (US$) discounts on DVD purchases with each DVD rental.

The sites are “joined by a comprehensive product-by-product, cross-linking program,” the companies said. When customers look for a particular movie on NetFlix.com, they will be given the option to rent the DVD from Netflix.com or to purchase it from SamGoody.com. Similarly, customers who visit a page for a specific movie on SamGoody.com will also have the option to rent it from NetFlix.com.

NetFlix.com also plans to send e-mail newsletters to customers of both Web sites. The e-mails will be tailored to customers’ individual interests, based on their rental and purchase profiles, and will announce upcoming new releases at both sites. NetFlix.com will also promote Musicland’s “Replay” customer loyalty program, giving new program members eight free DVD rentals from NetFlix.com when they sign up.

About the Companies

NetFlix.com carries virtually every movie — more than 3,700 titles — that has been released on DVD. The company offers seven-day rentals, same-day-shipping to anywhere in the United States, advance movie reservations and multi-rental discounts. The company, based in Silicon Valley, California, also has promotional relationships with Sony, Toshiba, RCA/Thomson Consumer Electronics, Panasonic, Philips and Kenwood.

Musicland, based in Minneapolis, Minnesota, operates 1,325 retail stores and five web sites — SamGoody.com, Suncoast.com, MediaPlay.com, OnCue.com and Requestline.com.