Netflix has been eroding Blockbuster’s profit margins for quite some time, but it wasn’t until today that I saw confirmation that Blockbuster just doesn’t get it. I have been extolling the virtues of Blockbuster over Netflix for years, partially due to the in-store exchange option, and partially due to bonus free game rentals.
For example, when I started with Blockbuster, I could exchange my movies received by mail at the store for any free rental I wanted and the next movie in my queue would be sent immediately. However, after several months of this, Blockbuster decided to go beyond getting rid of late charges and instead decided that any rental by a TotalAccess subscriber could be kept indefinitely. The catch: no longer would Blockbuster send out the next DVD in your queue until you return the movie rented in-store.
This was something I could live with, as I still got to rent whatever I wanted, but it did increase the down time I had between movies. But, I was still able to rent two movies or games each month for free, thanks to the coupons given to me as a TotalAccess subscriber. This was great, because there were so many games out there that I wanted to try, but didn’t want to buy unless I knew they were worth it. This was an excellent feature of Blockbuster’s plan, but it recently fell apart.
Tonight, I returned a game to Blockbuster and rented another. During the checkout process, I was informed that I had late fees. This was news to me, as I haven’t had late fees since I started as a TotalAccess subscriber. It was then explained to me that about two weeks ago, Blockbuster changed the terms of their game rentals. Up to this point, every game I rented had no late fees unless kept 7 days beyond the return date, at which point it was converted into a purchase. However, now every day past the initial 5-day rental period is a dollar and then the rental is converted into a purchase.
Thankfully, I was told that I don’t have to pay the late fees, since I wasn’t told about the change, but it didn’t stop me from deciding to quit Blockbuster in exchange for Netflix. i don’t get to rent games, but it’s cheaper and I can have unlimited streaming to my computer and Xbox. It’s a shame that Blockbuster doesn’t get what makes Netflix so profitable. It’s not about finding new ways to charge the customer, but rather making the customer want to use your product more than the others. Let’s hope that Netflix never loses sight of that goal after Blockbuster is dead and gone.