GameFly's plan to go Hollywood next month and launch a companion movie rental business could be more an act of self preservation than an attempt to take down movie rental giant Netflix.
The company's announcement of the new service was sent to its current customer base via an email campaign starting yesterday. The email said the new service, called GF Movies, will the start operating on April 4, although certain users can already add movies to their GameFly GameQ.
The reasoning behind the move could be the changing gaming industry. GameFly is now looking at a game console world that is becoming dominated by devices that allow electronic downloads, circumventing GameFly's mail order model. So the new rental service could help keep GameFly relevant.
The concept has a great deal of merit, despite the fact that most movies are now electronically downloaded and that Netflix has decided to devote less focus to its mail-based rental business. The installed base of GameFly users are accustomed to waiting for their games and having movies on tap could help the company during those periods when there is a dearth of new game titles.
In addition, except for movie purchases there are no start up costs involved with the new service as it is an exact duplicate of GameFly's current model.
The GF Movies will offer both DVDs and Blu-ray discs for purchase or rent and to make it simpler for its current customer base a new account will not be required. GameFly will keep its model of allowing customers to take out one or two movies at a time.
The service is currently in beta GameFly has created a home for the new service and is testing with customers who subscribe to the company's two-game or more per month rental plan.
"We're viewing this as a test based feedback we've received from subscribers who asked for it," said Gamefly CEO Dave Hodess. He added that the company plans to monitor data on movie rentals and make adjustments as necessary.
The GameFly plan interestingly swims in the opposite direction of Netflix's failed attempt to add game disc rentals to its movie service in late 2011. At that time Netflix announced it would enter the business, but then changed its mind and decided against going through with the move.
