Posted on 12/14/2004 5:46:37 AM PST by MississippiMasterpiece
NEW YORK (CNN/Money) - Blockbuster Inc. announced Tuesday it is abolishing late fees on all its video tapes, DVDs and video games as of Jan. 1.
The world's largest video rental company will still have due dates for their rental products -- one week for games and two days or one week for movies, depending on whether it's a new release.
But customers will be given a one-week grace period after that to return the product. After that grace period ends, the chain will automatically sell them the product, less the rental fee. If the customers don't want to purchase the movie or game, they can return the product within 30 days for a credit, less a restocking fee.
Blockbuster has been competing with the growth of by-mail rental services such as NetFlix, which allow customers to keep movies as long as they want in return for a monthly fee. In August, Blockbuster started offering that kind of monthly rental service itself. It said Tuesday that service will continue in addition to this new individual rental policy.
"For the past year, the company has been testing a variety of rental options in markets across the U.S.," it said in its statement. "In no-late-fees test markets, the increased rental transactions and retail sales offset the lower level of revenues resulting from eliminating late fees."
It estimated that late fees would have contributed about $250 million to $300 million to revenue next year.
The company said it also plans to lower its ongoing marketing, operating and promotional costs after implementing the change.
(Excerpt) Read more at money.cnn.com ...
Nice to see any company affect a company (Blockbluster) owned by Sumner Redstone.
Late fees were a racket. You could have bought the movie for what they charged in late fees. Plus they gave you no slack. If you did not return a movie before they closed, they counted it for the next day.
That is a remarkable figure for a $1.5 Billion company with no earnings? It would seem that collected late fees would represent revenue with zero cost. It is so remarkable that I would have to question it.
I joined Netflix when it first started.. Never been a brick and mortar rental place since.
I've been using Netflix for 3+ years. They've dramatically increased their inventory and distribution warehouses. Turnaround is now 48 hours (e.g., send DVD's back on Tuesday, get new ones on Thursday). I have the 8-out plan because a lot of my rentals are documentaries which tend to be an hour long.
Why would I go to Blockbuster even with the "unlimited" scheme? Their inventory sucks.
The only bad thing about Netflix is the rudimentary search engine. It's probably intended that way, because the imprecision of the searches often reveals interesting stuff one may not have considered.
It's random. Sometimes they'll give you a break, but more often they'll ding you for being 5 minutes late on the return.
Actually, I bet it is the lawyers who affected this decision. Blockbuster already got sued for outrageous late fees once in a class action. Nothing is more aggravating than returning a game/movie a hour late, getting charged the additional "rental" fee, and then have Blockbuster rent the game/movie out that night. But then again, its the rules of their business.
"What about 'Day After Tomorrow'? I know it's supposed to suck, but I want to see the special effects.
"Nah."
"How about 'Cold Mountain'? It's supposed to be good."
"Nah. It's from the director of 'English Patient' and it's like 3 hours long."
And so on. Then we watch 'Happy Days' on Nick at Nite.
It's funny how when you finally can get thousands of movies at your fingertips, at the push of a button, you lose interest.
If it's a new movie, there is an opportunity cost. Someone else might be renting the movie if it was in the store, and maybe at a higher price than the late fee (I don't know the former pricing arrangement).
But yes, it is rather amazing, and means they saw handwriting on a wall somewhere. Maybe customers returning a movie at their leisure are more likely to rent another movie at the same time. I wonder, though, how long before all this stuff is done over the internet.
So true. Our family went without television for 9 months. I did away with cable. They were constantly compalining that there was nothing to watch. Now, we have satellite service and they complain that there is never anything on. Go figure.
So I can go rent a $5 game and play it for 9 days now?
cool!
That's why I stopped going to Blockbuster and just did PPV. I wouldn't pay the later fees and didn't like the hassle of instant return. Looks like Blockbuster got the message.
My ex daughter-in-law was once one second late in returning a movie. They tried to charge her a late fee
I've written emails to them about that. Specifically I'd like to be able to sort by date of DVD release. You'd think this would be a given.
There are a lot of third party software applications that will do more complicated searches for you. I've only tried a demo of netflixfreak for the mac.
I started with Netflix because that was about the only way to red DVD's.. Blockbuster and others were still dealing tape...
This Greencine looks interesting...
Our local Hollywood Video offers the same deal as Netflix.. a little cheaper. I just videos and DVDs from the library... put some my tax paying money to use *lol*
It is $20 a month for a two game plan. It works just like netflix. I usually get the games in two days. I got tired of going to blockbuster and all the new games were never in. With gamefly, you can keep the game until you solve it.
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