I just want to add a “me too” to the group of folks who say the OP doesn’t speak for them. I’m generally suspicious of large corporations, doubly so when people insist the free market solves all ills, and this new Blockbuster arrangement sounds like a fair shake to me.
It takes ten freakin’ seconds to drop your rental in the return box, kids, and giving you an entire week to do that is generous beyond belief. Anyone who incurs a “penalty” under this new system needs some serious organization in their lives, IMO…
This just in, from CNN Daybreak. The restocking fee on rentals greater than 7 days late but less than 30 days out will be $1.25.
This travesty against the American consumer cannot go unchallenged. How dare Blockbuster charge such an onerous restocking fee. I plan to start a letter campaign to my federal, state and local governments to stop this unfair practice…ooh, look at the pretty holiday lights.
No waiting time, but believe me - Blockbuster’s selection will never be able to compete with Netflix - they just don’t have the room. This especially holds out for classics and foreign films. Add to that I don’t have to drive anywhere to pick up or return a movie (they come to my house, I mail them out from work) - there is no way that Blockbuster can compete with Netflix.
I pay just under $20/month for 3 movies at a time. My turn around time’s about two days, so if I mail something on Monday, I usually get a new movie Wednesday. Their customer service is wonderful. There have been two instances where a dvd got damaged on the way to me. I filed a claim online and they immediately mailed out a replacement (without waiting for me to mail the damaged one back).
I’ve also had two instances where a dvd was lost. I filed a claim online, they mailed me a new one (or credited my account if it was lost on the way back). You can’t do that every month, obviously, but they don’t treat you as a criminal for a random loss. In both instances the movies eventually ended up back at Netflix, so I have a “clean” account.
Blockbuster sucks. Not so much by intent, but simply by design.
I often return movies late. This isn’t because I’m too stupid to be able to return them when I’m supposed to. It’s because I have a life. I might rent a movie to watch on a Friday night I plan on spending in. Then my phone rings, my plans change, and I end up not watching the movie until the next day or the day after that. I’m certainly not going to change my plans to avoid paying a late fee.
As a result, I often end up paying $4.50 (or whatever it is) to rent the movie. Then I pay another $4.00 in late fees on the movie. At that point, I’d be better off to simply go to Walmart or Ebay and buy the damn thing for $10.
Blockbuster overcharges for it’s rental fees and it’s late fees. Their business model is outdated by Netflix. DVR’s and Cable On Demand make it more convenient (and free) to watch recorded movies than to rent them.
The employees are drooling idiots who I’d rather not have to deal with at all. (XJETGIRLX being the exception to this rule, I am sure!)
It’s not so much that Blockbuster is Evil. It’s just that it’s a shitty place to rent movies from. I never made any concious decision to stop renting at Blockbuster, and I still carry the card in my wallet. But, I’d say it’s been over a year since I stepped into one of the stores.
No linky-dinky because WSJ is a subscription site and I access it through my employer. Italics added.
Now I’ve found something to pit Blockbuster about. How in hell are you going to pull in more customers while cutting back on promotion and marketing? Does anyone in your corporate hq see the inverse relationship there? I think their rosy projections are making them ripe for a shareholder lawsuit (a subject for another pit thread at some point in time).
I’ll let you answer this yourself. Why did Blockbuster drop the ball? Give us a likely scenario. I can pretty much guarantee that it wasn’t “Hey, we’re just working grunts who hate dealing with late fees, but I’ve come up with a diabolical master plan to slightly increase the profits of our shareholders.”
They were overworked. They forgot. They collected the movies and set them on the counter to check them in, but one got missed. The movie fell between the drop box and the wall after it went into the slot. Alice told Bob that she’d get them but didn’t.
I’m giving them the benefit of the doubt, and I’ve got nothing against the video store workers. I’m commenting that the removal of late fees makes me happy, because they have been incorrectly applied to me in the past.
Or maybe, just maybe, they are out to get me. I haven’t claimed that yet, but maybe I should start now so we can have a nice long fight.
Firstly, I’m not sure why Blockbuster is getting singled out for this business model. Until very recently all video stores had this exact same model. And it’s one that made sense. And now, Blockbuster is changing its model to bend over backwards for lazy and inconsiderate customers, and people still say they suck. It doesn’t make any sense.
Secondly, BB rented you a video on Friday night on the assumption that you would, you know, watch it on Friday night. If you want to change your plans, why should BB foot the bill for your fickleness? If you want to change your plans, that’s fine, but any consequences of that are your responsibility. BB shouldn’t have to lose profits over that.
I’m not a Blockbuster member. I’ve contemplated joining Netflix, but haven’t done so mainly because, depending on how busy i am and what else is going on, i can sometimes go four or five weeks without renting more than one or two DVDs. Outlets that charge of a per-DVD basis will usually be able to compete for the business of the (admittedly small) number of people who are only sporadic movie renters.
Another reason that i haven’t yet gone for Netflix is that our local independent video store is fantastic, with an excellent selection of foreign and non-mainstream films. Sure, it doesn’t have the selection of Netflix, but i’ve still got a long way to go before i exhaust the supply of good films.
And finally, i tend to be something of a “mood” guy when it comes to movies. That is, when i go to rent a DVD, i’m often in the mood for a particular movie, or at least a particular type of movie. Obviously, if i joned Netflix i’d have complete control over my list, but i wouldn’t be able to change the fact that tonight i feel like a comedy, and i have two thrillers and a drama in my mailbox.
Total bullshit. They’ll only need a fraction of people to be late and they’ll still clean up. Don’t get me wrong, I could care less, but don’t give us this bullshit of “no late fees”.
Izzat so? So tell me, Mr. economics genius, what fraction? There’s enough information in this thread an in BBI’s SEC filings to make a reasonable guess. So go ahead, smart guy. Take the numbers and make back $250 MM with $1.25 restocking fees for rentals over 14 days and DVDs sold after a month. Be sure to include an estimate of how many of those DVDs would have been sold to the late-renting customer anyway and the differing margins between sold and rented product (before library amortization).
Or follow D_Odds example. Blockbuster is probably full of crap all right. The crap what they’re telling investors about how they hope to make back the money. (In fairness, it’s not total crap – it’s just going to be a damn sight harder to acheive than they’re indicating.) FWIIW, D_Odds, I think they’re hoping to focus their marketing a little better toward profitability – less couponing, etc. and more on things that increase full-price traffic. As to whether it succeeds… Heh. We’ll see. I have my doubts about whether NetFlix’ model scales as well as they hope it will (and they just changed their library amortization policy to make it less conservative than BlockBuster’s – perhaps their method is correct, but more aggressive accounting is seldom a good sign), so this could be a case of Blockbuster just trying to wait out what they hope is simply a storm in the marketplace.
Yes. I am aware that Blockbuster sells DVDs. Thank you for pointing that out. Let me be perfectly explicit, since I obviously need to make all of my statements as comprehensively accurate and binding as an eighteenth-century peace treaty:
Perhaps Blockbuster is planning to stop renting DVDs altogether in favor of selling them, and this new late-fee policy is the first step toward phasing out rentals.
Is that clear enough? Be sure and read it as closely as possible for anything that you can possibly misconstrue. And while I’m explaining, let me also make clear that I don’t knwo they’re doing this; it was a passing thought that I tossed out, wondering if anyone would corroborate or refute it.
“Sigh” indeed. Sarcasm is corrosive.
My point here is NOT that people can’t return videos on time, nor am I saying that people are forced to rent from Blockbuster. Any asshole can see that those are obviously false, and discussions like this one might actually accomplish something if you would refrain from oversimplifying for the sake of a pile-on.
My point here IS that Blockbuster is a huge corporation that totally dominated its market for many years. They’re not idiots when it comes to business strategy, and I am certain that they did loads of research into what this change will mean for their bottom line. And there are a couple of important facts that Blockbuster knows, and you and I know them too:
[ul]
[li]People are able to return videos on time, but they won’t.[/li][li]People are NOT forced to go rent from Blockbuster, but they will anyway. [/li][/ul]
This is called “being human.” Sometimes we don’t do the best thing, or the smartest thing. We keep videos late; we choose a video store based on geographical convenience because we’re on the way home from work and we’re fucking tired. Blockbuster knows this; more importantly, they know that there are tens (hundreds?) of thousands of customers who just don’t rent from Blockbuster anymore because they’ve got huge late fees waiting on them.
Blockbuster’s dilemma? There are all these outstanding late fees that the company really doesn’t need, and those late fees are diverting millions of dollars into their competitors’ coffers.
Solution? Drop the late fees! Hooray! It’s amnesty day!
The problem (from the consumer’s point of view): Keep a movie for a week past the due date, and they will automatically charge the movie’s price to the credit card you have to give them to open an account. No phone call, no letter of warning; you fish that old DVD out of the back seat, sheepishly go to return it, and they grin and say, “No sweat, pal; you bought it.” Not to mention it’s at a price unilaterally determined by the seller, after the buyer has legally consented to the sale.
Exactly my point; no matter what they do, they’re going to make less money than before because of Netflix. This option will let them bring in more money than sticking to their old ways.
A one-time restocking fee of $1.25 is hardly commensurate with the $3.00 daily late fee. Giving customers a month to return a video and then charging a measly $1.25 (which they’ll probably waive in half the cases) does not strike me as a workable model of price gouging. In fact, it strikes me as being generous to a fault. Even public libraries aren’t this nice about things.
From D_Odds’ post, it looks like the purchase price will be about $12 less rental fee, and restocking is $1.25. Both of which compare, IMHO, very favorably to their current late fee structure, from the customer point of view.
You get a week grace period, which you don’t get today. You get charged a maximum of $12 or so to keep the DVD and a minimum of $1.25 to restock, if you bring the thing back 30 days late. Hell, you get charged $1.25 to return a movie a week late, that’s not bad at all, you get charged $12 for not returning a movie at all, that’s not bad either.
The devil is in the details, and I think THESE details work out very nicely for blockbuster customers. Onerous late fees drive customers away from renting to Netflix and OnDemand cable. This fee structure is significantly less onerous than before, but does still put some impetus to get the DVD back to Blockbuster. The immediate charge to credit card will put the fire under people’s butts to get the fee taken off post haste, by returning what they’ve rented.
They already said, about $8. Far less than what late fees would otherwise be.
If said dumb person rents a movie with the full understanding that it needs to be returned within 7 days, then keeps it for a month, then complains about getting charged $8, and instead gets charged $1.25, then said dumb person deserves to get bilked for far more than that. Send me said dumb person’s name and address, and I’d gladly take care of his overabundance of cash personally.
Honestly, I cannot for the life of me work out the new numbers to show that BB is the Heart of Evil.
Starting January 1, any Blockbuster customer just got a free seven day extension for their video rentals. They can hold a video for up to 30 days for only $1.25 over rental cost.
My mileage varies because I am so obviously blind and stupid that I fail to see how Blockbuster is trying to bilk “dumb” people of any more money.
By the way, I did post the average cost for a video purchase. $12.00 (extra charge of $8.00 after the rental fee if more than 7 days late).
manhattan, I figured that their new marketing plan would try to be more focused and more bang-for-the-buck. Will it work? As you said, we’ll see.
How is this a problem from a consumer’s point of view? Do you believe that the consumer should be absovled of all responsibility for a late return, and that Blockbuster should eat all lost potential revenue from a consumer who keeps rentals in the back seat of his car rather than returning them for future rentals?
Not knowing full details, I would expect prices for non-return to be displayed on a rental. Maybe they won’t. Blockbuster will send a card after you’ve gone over your grace period, saying (probably not these words, but effectively) “Thank you for your patronage by purchase Ishtar for $16.50. Your credit card on file, Visa xxxx 1234, has been charged $12.50, $16.50 cost less $4.00 rental fee. You can return the rental up until February 31, 2005 for a credit of $11.25 ($12.50 - $1.25 restocking fee)”
This is not about free-market capitalism, or blind corporate love. This is about the knee-jerk reactions that any large corporation move is automatically designed to hurt the consumer. I’m looking hard, but I don’t see it.