In a wonderful display of competition, Blockbuster said
today that it is giving Netflix subscribers free rentals from Dec. 5 through
Dec. 21 in exchange for the tear-off address flaps of their Netflix rental envelopes.
Netflix subscribers who wish to participate in the program
can tear off the address flaps they normally discard when mailing back their
DVDs and turn them in at any participating Blockbuster store to receive a free in-store
movie rental. They can continue to bring in their envelope flaps and exchange
them for free in-store rentals for the duration of the promotion. Netflix
customers do not need to subscribe to Blockbuster's online program to
participate, but a Blockbuster store membership is required. Also, the name on
the Netflix tear-off flaps must match the name on the holder's Blockbuster
"This holiday season, Blockbuster Total Access is
giving Netflix customers the gift of immediate movie gratification," said
John Antioco, Blockbuster Chairman and CEO. "We want these movie fans to
experience getting the movies they want without the wait so they never have to
be without a movie, just like Blockbuster Total Access subscribers."
When asked to comment on Blockbuster’s latest move, Netflix
seemed unfazed. "I think most folks know that if you get something free
you're getting what you pay for," Netflix spokesman Steve Swasey said to Reuters.
"The very reason for online DVD rental is that you don't have to go to the
store. It's the convenience, selection and value."
Wedbush Morgan analyst Michael Pachter said: "This
isn't about subscribers. Subscribers don't matter … What matters is that
Blockbuster is not likely to ever lose another customer to Netflix (as a result
of Total Access). Ultimately you look at value for your monthly fee."
Blockbuster Total Access is a movie rental program that
gives online customers the option of returning their DVDs through the mail or
exchanging them at more than 5,000 participating Blockbuster stores for free
in-store movie rentals. When subscribers return their online rentals to a participating
store, the store check-in process automatically initiates the process of
shipping of the next available movie(s) in the subscriber's rental queue, whether
or not they take advantage of the free in-store rental. Existing subscribers to
Blockbuster's online rental service were automatically upgraded to Blockbuster
Total Access at no extra charge when the program was launched Nov. 1, 2006.