Earlier this week when Netflix decided to sue Blockbuster over its business model patents, the one thing that seemed odd to many was the timing. After all, Netflix had been able to continually wallop Blockbuster in the market, despite plenty of fears for many years. When Blockbuster first entered the online video rental space, many thought Netflix was doomed -- but they managed to keep growing at a much faster rate while Blockbuster seemed unsure of what it really wanted to do with the online offering. Early on Netflix's actions even made clear that they were more concerned about competitors like Amazon than they were by Blockbuster or WalMart (who eventually outsourced their effort to Netflix). In fact, there was even talk recently that Blockbuster would ditch its online component completely and focus on its core business of renting from stores. They apparently decided against that late last year and refocused their efforts, but it was still considered well behind Netflix. So, in suddenly sending out the patent lawyers, does Netflix risk legitimizing the competition from Blockbuster? It certainly seems like the way Blockbuster is spinning the lawsuit, noting that it's their sudden surge in the marketplace that has Netflix scared. With there already being plenty of doubt about Netflix's ability to prevail -- will this lawsuit completely backfire and simply serve to make people more aware that Blockbuster has a similar offering?
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