Cutting late fees slashes Blockbuster's revenue

newschannel5.tv ^ | August 9, 2005

[Altair333]

Cutting late fees slashes Blockbuster's revenue Tuesday, August 09, 2005 DALLAS (AP) - Blockbuster fell to a loss in the second quarter as its decision to cut late fees cut into its overall revenue.

The nation's biggest movie-rental chain lost 31 cents a share, compared with a 27 cents-a-share profit the year before.

The company says overall rental revenue dropped to just over a $1 billion, hurt by a steep $138 million plunge in late fees. Merchandise sales, however, were up 12 percent.

Blockbuster also withdrew its previous guidance for fiscal 2005, blaming the "uncertainty and continued decline in the rental industry."

[hosepipe]

Obviously a "liberal" company executive makes another bad mistake.. i.e. other than his/her political choices..

Renting movies to the proletariat should have consequences.. when it doesn't.. "FREE MOVIES" is understood.. The democrat party has been breeding parasites for generations..

[flashbunny]

pretty much. I was charged a late fee for returning the movie the same day but not by noon - when the cashier only said "they're due back tuesday" -who returns a movie by noon on the day it's due? Why call it a five day rental when it's only four and a half days? Plus no receipt indicating what time it was due back.

So after getting a postcard demanding several dollars in late fees for movies I did return on the day I was told they were due, I stopped going to blockbuster.

Once I read about their 'end of late fees' deal, I knew it was a scam. They'd probably be making money on it,but a bunch of states AG's jumped on them really quick once they figured out what was happening.

It couldn't happen to a better company!

[Indy Pendance]

You are so right! My kids were notoriously late returning movies. It wasn't uncommon to have a $20 or more late fee. What a racket, but they were pretty much the only game in town. When the new store opened, you could tell blockbuster was losing business, the parking lot was never crowded as in the past. I haven't been in one in at least 5 years.

[flixxx]

I do not know how Blockbuster's service works. With netflix, you have to be sure your series discs are in order (though there is an 'add all' option that will automatically place them in your queue in order). Plus you can move around your movies up and down your queue order online as you wish.

[q_an_a]

wait till you see all what is at Netflix - we stopped our monthly all you can rent program at Blockbuster for the same reason you described. They cut out old movies and replaced it with games. Our store told us, "We are not going to carry that video, but call around and join another store they will have it." Some service. But netflix has tons of movies, TV shows and they show up in two days.

[Cyclopean Squid]

I'm a fan of Netflix as well. Their selection is immense and the queue feature handy. I must have about 150 movies on there. I usually add entire series at one time. Currently I am working my way through the superb Babylon 5 series.

[absolootezer0]

love family video, too bad they aren't in the further out suburb i'm living in. their all over lansing and some of the closer 'burbs tho.
i agree tho, one of the best rental places i've gone to.

[The Enlightener]

I stopped going to Blockbuster for several reasons. One day I went into the store and they set up a new line system to be more efficient. It was one of those deals where everyone stands in a long line and someone yells "next!" when they are free. However, they had a handler at the front of the line, and if you moved because you saw someone finish up, the guy yelled at you and made you get back in line until the lonely assistant said "I can help the next customer". This new process only lasted a month, probably because of people like me who like to shout "Heil!" and give a Hitler salute to the handler.

But the final straw came the day I went there and had not rented in six months, and the weenie behind the counter told me my card had expired because Blockbuster deactivates any card not used for six months. He told me he could not reactivate it, and that only the store I originally got it from could. I tried to explain to him that: 1) I got my blockbuster card from a store three hours away, when I was in college, and 2) the store had closed three years ago and was now a bookstore. The clerk said that if I could not reactivate it at that store I would have to apply again at this store.

At this point I had been renting movies on that card for over 10 years! Anyway, I explained to the lad that this had happened before, and all the clerk has to do is reactivate the card, as had been done before at this very store. The clerk looked at me like I might be some kind of terrorist, and insisted on calling the number on the back of the card to verify that I really belonged to the other store. He dialed the phone several times, but no one would answer. Finally a manager came over and asked what he was doing. The manager laughed at him and told him just to reactivate the card.

I thought at least someone knows what he was doing, until it took him ten minutes to figure out how to reactivate the card, but then still could not get it it to work. Then I just gave up and walked over to Hollywood video, where I used my card that I had not used in three years, and it worked. I have not set foot in a Blockbuster since.

[Paratroop]

I bought a bunch of DVDs while in Iraq, we would get them with 2 or 3 movies on each DVD, and it only cost about $4 bucks each. Kinda cool...saved lots of dough. Drive to the store was a bit hairy though.

[raccoonradio]

>>Netflix is cleaning their clock

They sure are. I work for the post office and I see a ton of those mailers!

I don't rent too many movies so I don't bother with Netflix. I rented "Team America: World Police" Saturday from Blockbuster and returned it Monday (though actually saw it Sat nite so I could have returned it Sunday; whatever).

They had more than enough copies. Yet not far away from me,
as I picked the DVD out, was a guy on his cellphone, apparently calling home to the missus. "I tried that one, they're
all out. Yep, that one too--no copies. So what else might be good?"

[The Enlightener]

I was charged a late fee for returning the movie the same day but not by noon

I once got into an argument with the clerk about that same issue, where the clerk was claiming it was a five day rental and wanted it back in four, because, they claimed, the first day was the day you rented it. So, on a two day rental, you had to return the movie the next morning by noon, even if you rented it at 11:00PM, which is only 13 hours later! It was probably people like us that they eventally changed to time to midnight on the second day instead of noon, but when they did this, they raised the rental fee by a dollar.

Did I mention I no longer go to BlockBuster and I get mad every time I drive by one?

[kinghorse]

yep. they even got so aggressive as to go hour to hour rather than by midnight. If my wife and kids would stop using them, they would be toast. Netflix is going to sell by online download soon.

[GOP_1900AD]

But if they did not cut late fees, everyone (or most everyone) would switch to Netflix and BB would go completely out of business. At least this way, they might survive in a lesser form.

[fatrat]

i was using walmart online dvd rentals but recently switched to blockbuster as walmart discontinued their service and partnered with Netflix. i read a reveiw somewhere that blockbuster was the better value. i have been very pleased with my service. i have the 3 dvd plan where i always have 3 in hand or on the way and it costs me $16.04 per month including taxes.

in addition to being able to keep 3 dvds at a time, i get 2 certificates each month for free rentals at the local blockbuster. the service is quick and probably will get quicker as i have heard that blockbuster is going to start shipping replacements from their local stores soon instead of from central locations.

i turn mine around quickly and have been able to watch an average of 3.5 movies per week so that works out to just over $1 per movie.

[IL Republican]

Exactly!

I buy Starz for $10/month. They have a lot of their movies "On Demand". I also can buy from my cable company at $4 a movie.

Starz also offers a service which allows you to download movies to your PC. I have a 4MB/sec connection, but no good way to transfer the picture to my T.V. This will be great when Computers and home entertainment fully integrate!

[flashbunny]

I didn't even realize they changed the time to midnight - or raised their prices. I don't really get mad at them - I just smile when I hear things are going bad for their business.

The day of the storefront video rental business are numbered.