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The free hand strikes in the online DVD rental market

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 membership account.

"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.

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I return the same day they arrive
By jmunjr on 12/5/2006 10:12:56 PM , Rating: 1
I rent 8 at a time, and when they come in I rip them to my hard drive and send them back the same day. I can get 60-80 movies a month like that, all stored on my hard drive for viewing at a later date.




RE: I return the same day they arrive
By Etsp on 12/6/2006 1:05:59 AM , Rating: 3
I wish I had your storage solution....


RE: I return the same day they arrive
By Spivonious on 12/6/2006 10:35:29 AM , Rating: 4
You do realize that what you're doing is illegal.


By retrospooty on 12/6/2006 11:11:09 AM , Rating: 1
"You do realize that what you're doing is illegal."

LOL... Always one in the crowd.


RE: I return the same day they arrive
By TomZ on 12/6/2006 11:24:02 AM , Rating: 2
It's only a practical problem if he/she if giving away or selling copies of the movies. Nobody is going to bother you if you have personal copies that you don't share with others. Get real.


RE: I return the same day they arrive
By sabby1225 on 12/6/2006 12:28:42 PM , Rating: 2
No, it's clearly in violation of the DMCA; circumventing copyright protection.


RE: I return the same day they arrive
By Farva on 12/6/2006 12:37:00 PM , Rating: 2
...poor poor 321 Studios...


RE: I return the same day they arrive
By TomZ on 12/6/2006 12:44:38 PM , Rating: 2
I didn't say anything about it being illegal or not. Speeding is also illegal, but most drivers also speed. I was just saying that from a practical standpoint, if you're keeping your copies to yourself, you are unlikely to be bothered. This is because you are not causing any real economic harm, so there is no financial incentive for anyone to go after you. This is different than, e.g., if you put up a server and allowed others to access your ripped DVD movies.


By courtjester123 on 12/7/2006 6:05:01 PM , Rating: 2
TomZ your arguments are pointless. There is no way you can possibly justify such blatant piracy by claiming it's a victimless crime. If all Netflix customers rented 60-80 movies a month do you think they would still be in business? No. Even as one of the 4 largest customers of the U.S. Postal Service, do you think Netflix gets their mail service free of charge? No. The higher their costs, the more they pass those costs to all of their customers, equally, in real dollars that come out of peoples' pockets. This person might not get bothered but that doesn't mean it's not harmless. Sure, defending anti-piracy is not a popular thing to do, and one may not get sympathy for the movie studios and other people getting fat on the huge costs of entertainment, but get real.


Blockbuster
By Farva on 12/5/2006 10:58:27 PM , Rating: 3
I work at Blockbuster, but I have not had to do this Netflix tearoff promo yet as I didn't work today. Funny thing is that this is the first I have heard of this promotion...and I was at work yesterday...gotta love that corporate communication chain.

Anyways, Netflix does needs to do something because Blockbuster's online program tends to get movies to the door faster as the movies ship from both distro centers and the stores. I don't say that because I work there; I don't give a rip about Blockbuster. However, I think the next few years will be very interesting as Blockbuster has been trying extremely hard to steal Netflix customers. Personally, though I think none of you should take advantage of this promotion because I just don't want to have to deal with slips that people went digging though the trash for. lol




RE: Blockbuster
By Chaser on 12/6/2006 9:42:15 AM , Rating: 2
I have used Netflix and my g/f tried Blockbusters online service.

Let's put a little perspective here. Netflix has been capturing more and more of BB's "store" market share and the bigwigs at B.B. there have noticed.

Their first response was their renigned "No late fees campaign". Remember the signs on the doors and windows that lasted about 2 months?

Apparently the backlash of videos showing up late at stores made this a bad decision as all those signs vanished replaced by little fine print disclaimers about "restocking fees." I myself had rented a Blockbuster video and 7 days later I received a friendly automated reminder call trying to explain that even though ther weree "no late fees" I'd be paying one if I didn't return my video promptly. this call was made on my cell phone, while I was at work.

Needless to say, that day I cut my Blockbuster card in two, attacked it to the outside of the rental box and returned it permanently. I don't do business with B.B. anymore.

Back to the Netflix comparision. Netflix built itself from the ground up as a mail order operation. Unlike B.B. Online that is trying to play catch up. And it shows. My g/f places an order with B.B. online and they don't arrive in the next day consistency like my Netflix orders do.

Now they are doing this Netflix label promotion. A good idea to get some Netflix people into the stores more but I don't think it will do much against the flood, like me.


RE: Blockbuster
By TomZ on 12/6/2006 11:26:37 AM , Rating: 3
The purpose of this promotion is to build up a database of Netflix users, so that they can entice them to become BB online customers. Online and store are two separate, but related, markets, and clearly BB needs to be successful in both if they want to continue to move forward.


RE: Blockbuster
By Farva on 12/6/2006 12:45:42 PM , Rating: 2
I agree that they are seperate markets, but Blockbuster is trying to combine them so that they can capitalize on having the comparative advantage of actually having physical stores.

Is this plan actually going to work or not? No one knows. Probably not all that well because most people don't like change and/or are just lazy. Then those people will not want to switch from Netflix and/or bother to come into the stores whether it be because there isn't a BB store around or because they just don't particularly like to go into the sun.


RE: Blockbuster
By Oregonian2 on 12/6/2006 2:07:49 PM , Rating: 2
But what is the advantage of a physical store? We've a couple blockbuster stores within two or three miles from home, but our mailbox is a LOT closer. I also can do a 'store search' on Netflix a lot easier than I can looking through physical store.


RE: Blockbuster
By Farva on 12/6/2006 5:49:02 PM , Rating: 2
The advantage of a physical store is mainly just for new releases. As someone else has said if you come in on a Tuesday or Wednesday you are almost guaranteed the movies that just came out that week. With an online que it is a toss up as to whether your movie will ship or if you will have to wait for the popularity to die down.

I had Netflix when it first started so I never had problems with this but I have heard many people complain about BOTH Netflix and Blockbusters online program not shipping the newest and most popular movies due to quantity issues.


RE: Blockbuster
By Farva on 12/6/2006 1:01:31 PM , Rating: 2
Very few people now actually get those automated phone calls. Some still do and no one on the store level really knows why as it is a corporate database computer that makes the calls.

As far as the no late fees...it is a $1.25 fee per movie but you have to realize that you have 10 days AFTER the due date to return the movie so a week long rental can be kept for 17 days before any restocking fee is imposed. Then it says only a $1.25 for 30 days after the 17 that the movie has already been out. Of course, after the 30 days the movie is charged off and the customer not the owner of that movie and must pay for it, but for this to happen the movie would have had to been out for a grand total of 47 days. I would just personally like to know how someone cannot return a movie within 47 days. 17 days for that matter aswell.

Yes, I know the back of the receipt says 7 and everyone will tell you in the store 7, but the computer doesn't charge until 10 days after the due date.


RE: Blockbuster
By Oregonian2 on 12/6/2006 2:16:34 PM , Rating: 2
What do you mean about 'get out the door faster'? Vast majority of the time, Netflix sends out my next video the same day one arrives, and I get it the next day. So if I receive a video on Monday, watch it Monday night, mail it back Tuesday, they'll get it Wednesday and I'll get my next DVD on on Thursday. Sometimes it'll be delayed an additional day and once in a while it doesn't come from the distribution center that's about 60 miles away (so add another day or two for postal transport), but at least 80% or so follow this quick pattern. Ones that come from "remote" distribution centers get sent back to my local one, so the added delay is only one way on those. Netflix has a *LOT* of distribution centers, so I don't think my experience is unusual. Yes the top half dozen DVDs on my list have been sitting there forever ("long wait"), but those are ones that Blockbuster stores wouldn't even think of having -- so store waits would be even longer. :-)


Overwhelmed
By microAmp on 12/5/2006 7:32:39 PM , Rating: 2
Who wants to bet they'll get overwhelmed and they cut this offer shorter.




RE: Overwhelmed
By mattsaccount on 12/5/2006 7:37:17 PM , Rating: 3
I'm a Netflix subscriber but don't plan to take advantage of the offer. I'd rather pay simply to avoid having to go to the video store :) I suspect I'm in the minority. In any case, good for them. Give Netflix a reason to sweat a little.


RE: Overwhelmed
By gerf on 12/5/2006 7:59:35 PM , Rating: 2
I get it because there's no Blockbuster nearby, "Movie Gallery" nearby doesn't do monthly rentals, and charges up the arse.


RE: Overwhelmed
By Behlal on 12/5/2006 8:03:12 PM , Rating: 2
I used to use an online rental service, but issues with not getting my top choice and the wait was enough to make me move back to picking them up from my local store (barely a block away, so perhaps more convenient for me than others). I know many online rental services have now addressed the issues I had, but it is nice to just be able to go grab a movie that I only realized I wanted to watch five minutes earlier, rather than adding it to a queue and hoping it comes quickly. That said, every time I can't find a movie at my local store, I regret not having the online s