If Blockbuster's Best Response To Netflix's Downloads Is Buying A Dreadful Movie Download Service, It's Going To Have Problems

from the couldn't-get-a-date dept

Thu, Mar 1st 2007 2:25pm — Joseph Weisenthal

After spending about a year on the block, there's word that movie download site Movielink may soon be acquired by Blockbuster. Movielink, of course, suffers the same fate as every other movie download site, ~~it sucks,~~ it's difficult to use, burdened by DRM and generally doesn't provide much value. So, it's not entirely clear why Blockbuster would be interested in buying the site. The company obviously feels it needs to make a move to counter Netflix, which is lurching towards its own online video service. But if it actually wants to compete, why would it buy a proven loser? Considering all of the problems with other sites in the space, it would seem like there remains a major opportunity to create something original and cool. Then again, Blockbuster doesn't seem to have much interest in rocking the boat, as evidenced by its latest advertising campaign, which proudly states that they're identical to Netflix except that they also have physical stores.

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30 Comments

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Overcast, 1 Mar 2007 @ 3:16pm

Well see, I just recently went over to Netflix myself.

Blockbuster... and their 'no late' fees is just a buncha BS. I return a movie like 3 days 'late'. So instead of a 'late fee' I get a 'restocking' fee.

Now, in all seriousness - for the ease of just running up the street and getting the movie when I want, I was ok with Blockbuster's setup.

I really don't mind so much paying a late fee - but, like I complained to the guy at Blockbuster - they should call it a late fee. I asked him, "well why am I getting charged a 're-stocking' fee"

His comment was, "Well when a movie's not returned on time, we automatically charge your account for the price of the movie, if it's returned in under 30 days, we refund all but a restocking fee.'

My reply was, "ok, but from my viewpoint, it's an extra fee I'm getting charged, because the movie was returned late - call it whatever you want, it's a late fee from my viewpoint".

That was really enough for me. I felt more annoyed at that 'play on words' (it's one of my pet peeves) than I did paying a simple late fee.

So if I do rent anymore, it will be somewhere who can at least tell me up front they are going to charge late fees, if it's late.

But I dunno, since that - and trying Netflix, I've became rather fond of it actually.
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- Ben, 1 Mar 2007 @ 3:23pm
  
  Re:
  You know, if you're going to complain about something, you shouldn't outright lie about it. Blockbuster does not charge a restocking fee as soon as a movie is late. You have SEVEN DAYS after the due date before they convert the rental into a purchase. Then, you have 30 days to return it and pay a measly $1.50 restocking fee.
  
  I don't see why so many people are confused about this policy. It's straightforward.
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  - Anonymous Coward, 1 Mar 2007 @ 3:38pm
    
    Re: Re:
    Not to mention the fact that all of their stores are eventually moving to a single rental period. No more x-days depending on when it was released - they will all be 7-day rentals (that's before the 7-days you have to return it after the due date for a total of 14-days without being charged).
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  - Eddie, 1 Mar 2007 @ 5:29pm
    
    Re: Re:
    uhm, if its a 2 day rental then you only have another 2 days, not 7. So if he was late 3 days he could have meant after it was originally due.
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  - kneeL, 2 Mar 2007 @ 2:29am
    
    Re: Re:
    No.
    Blockbuster's "No More Late Fees" was a nice gesture but it was still downright false advertising. "No More Late Fees * " is more like it.
    
    "Virtually No More Late Fees!", also would have been less misleading.
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- Anonymous Coward, 1 Mar 2007 @ 4:07pm
  
  Re:
  You should look into that I don't think little Timmy working the counter for 5 bux an hour really knew what he was talking about. I have blockbusters online rental subscription. I can take my movies that I rent online into the store when I am done and exchange it for a movie there. So my usual routine is go to Blockbuster on Tuesday for the new releases and do the swap. New releases are due back in two days by noon. My movies NEVER make it back to the store until the following Tuesday when new releases are in again. By then I am 4 days late. The only thing I get is a phone call from their (999)999-9999 recorded customer service system telling me if I don't return the movies by a specific date (14 days from original rent date) then I am charged the full price for the movie. Never do I get this restocking fee, never does anyone ever say anything to me. I go in do the swap, they tell me when the movie is due I say to myself ok see ya in a week and repeat the process all over again. I think little Timmy took you for a ride and gave himself a raise on your expense.
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- FH, 1 Mar 2007 @ 4:13pm
  
  Re: Late Fees
  Gee around here you have to be ten days past the due date and then all they are charging is $1.25. Not to mention the Total Access..... I get about 12 movies a month in the 3 at a time through the mail and I get 13 at the store all for $18.
  I was only gettting about 15 with Netflix.
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- pudro, 1 Mar 2007 @ 4:29pm
  
  Re:
  Most late fees accumulate. Theirs doesn't so they consider it a restocking fee.
  
  Most people are too stupid to differentiate between the two types of late fees, so they use a different terminology to avoid a misinterpretation of their policy.
  
  Your annoyance is being caused by someone compensating for the stupid people of the world. Get used to it.
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Ben, 1 Mar 2007 @ 3:20pm

Total Access
I fail to see how Blockbuster's ad campaign is a bad one. Total Access provides a much better value than Netflix, and their ads capture this fact. It essentially gives you twice the rentals that Netflix does, at the same price. I won't be going back to Netflix any time soon.

As for the download service, I couldn't care less. All "legal" movie download services suck, and suck equally, because they're all on the DRM bandwagon. The only problem with Blockbuster going this route is the amount of wasted effort and money it will involve.
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DV Henkel-Wallace, 1 Mar 2007 @ 3:28pm

uhh, because of corporate parent?
You do remember that Blockbuster is still controlled by Viacom, right? So basically they are part of the movie business and wouldn't do anything that might suggest that the MPAA's view of the world is, well, screwed up.
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misanthropic humanist, 1 Mar 2007 @ 3:36pm

video stores
Yeah. Fair enough Overcast. I hate weasels who try and twist semantics about too. It sounds more like you (rightfully) took the hump with this guy for his attitude so I don't blame you for punishing them by taking your custom elsewhere.

But if you are honest with yourself, you having the disc means that someone else can't rent it right?

Or does it? Think about that for a moment and you will see how absurd the whole concept of "renting data" really is.

In my ideal video shop I would have a huge pile of blank DVDs out the back. Every time a customer came in and selected a flick to watch I would burn the chosen movie to a new disc and give them that.

The disc has a deposit on it, so if you bring the disc back in good condition you get a refund of 1.50 on your account. If you don't bring it back then you get to keep it. The unit charge includes the cost of the blank disc and the time to write it in the shop, say another couple of bucks.

There are no discs "out of stock" because each new customer gets their own. Hell, they can even bring in their own re-writable DVD discs and have the media fee taken off.

The actual charge for the *movie* can then be something very small, like 1.00, which goes to the producer.

If the MAFIAA were not so crippled in their thinking I think this would actually be a very good business model. It balances the absolute abundance of data with the scarcity of real physical tangible discs, it provides an incentive not to hoarde and return discs into the pool and it provides a revenue to the shop owner and the producer. All titles are available to all customers simultaneously and
choosing to not return a disc simply means that you bought it for 1.50, a little above the cost of the meda.

But what do I know about "business", I'm just a bloke who programs computers. :)
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Overcast, 1 Mar 2007 @ 3:36pm

You know, if you're going to complain about something, you shouldn't outright lie about it. Blockbuster does not charge a restocking fee as soon as a movie is late. You have SEVEN DAYS after the due date before they convert the rental into a purchase. Then, you have 30 days to return it and pay a measly $1.50 restocking fee.

LOL, not a lie at all!

Why would I bother lying? It was returned much sooner - it was like a 2 day rental.

So whatever - 7 days, 2 days - it's STILL A LATE FEE!

Doesn't really matter to me anyway. I just like the terms to be out front first. Not doublespeak.
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- J.R., 1 Mar 2007 @ 3:46pm
  
  Re:
  Dumb. Don't rent movies if you can't return them on time. It's called a deterrent. They want the movie back. If they don't deter you then there's no reason for you to bother to EVER return it.
  
  It's not double-speak either. It's marketing. Quit whining and complaining about stupid shit. You sound like a 5 year old.
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- Sam, 1 Mar 2007 @ 4:21pm
  
  Re:
  "LOL, not a lie at all!
  
  Why would I bother lying? It was returned much sooner - it was like a 2 day rental.
  
  So whatever - 7 days, 2 days - it's STILL A LATE FEE!
  
  Doesn't really matter to me anyway. I just like the terms to be out front first. Not doublespeak."
  
  The guy explained to me the whole policy and gave me a brochure about it. It's really simple. You have a week extra past the due date to not be charged anything. So you can keep a movie late, without any fees. But, what people fail to realize is you're STILL RENTING THE MOVIE FROM THEM, IT'S NOT YOURS FOR YOU TO KEEP! He told me that after the 7 days that they just assume that the customer is not bringing it back, and they charge you like you're going to keep it. I think that's fair, if I were a business I'd want to get my money too. Not to mention you get an additonal month following being charged with the product to return it only paying 1.25 (I guess it's 1.50 in other places from what the other guy said). If you think shelling out less than 2 dollars is such a hassle, you should remember what the policy was before. IIRC, it was charging you the rental price once your rental was late, and every time you would exceed another rental period.
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Anonymous Coward, 1 Mar 2007 @ 3:39pm

Eh, I prefer going to the store/blockbuster and renting a movie. I'm not a total lazy fatass like the rest of the americans, yet.
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J.C., 1 Mar 2007 @ 3:49pm

Blockbuster is WAY better
Blockbuster's deal is flat-out superior to Netflix. Period.

I've used both services and not only is blockbuster's customer service better but I don't have to wait to rent my movies. For the same price with Netflix I can have a movie mailed to me, return it to the store for another the next day, and then a day later get another in the mail before I've returned the store rental.

Netflix's customer service was the worst experience I've EVER had and their account throttling was so bad that it could take well over a week to get my movies delivered. When complained about what did they say? "Hrm.. perhaps it's your mailbox." – strange, I don't have a problem with anybody but your service when I rent a lot of movies. Want double-speak? Don't advertise UNLIMITED if you're going to limit.
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Anonymous Coward, 1 Mar 2007 @ 5:00pm

Singing Praises
Blockbuster is the only company that I feel guilty for using, because their online service is _so_good_. I feel like I'm taking advantage of them.

3 movies at a time, in the mail. When you turn in the movies at your local blockbuster, they mark them as received immediately, plus they give you three more rentals, free. Plus you get a free monthly videogame rental. It's absolutely insane. If this is due to them trying to compete with Nnetflix, viva la capitalism.

Plus I'm turning in movies days late all the time, 'cause I'm incompetent that way, and I've never been hit with a restocking fee.

And just last week, our dog ate the the case a video game rental came in, and the clerk just shrugged and said 'no problem.' I was expecting to pay a fee, but didn't have to.

How nice is it to actually say good things about a company? It's an odd feeling...
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A Mom & Pop Start-up, 1 Mar 2007 @ 5:50pm

As the war wages on...
I had a small shop, and Blockbuster couldn't touch my customers. Netflix, on the other hand, took me for almost 35% of my customers. My shop went under, but I haven't. The big boys can fight it out. Check out my site. I'm only serving my locals, and I'm happy about it... Anyone gotta question about this, let me know...
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Satisfied Customer, 1 Mar 2007 @ 8:10pm

Satisfied Customer
I have been using Blockbuster's Online 3 at a time deal, and have been extremely satisfied. But I must add that I don't really share in anyone's concern over the semantics of their late fee/re-stocking fee because I am a responsible human being and return their stuff when it is due. If I want a movie for keeps, they have great deals going on all the time for that, or I can choose to buy from anywhere. Renting, I hasten to add, is borrowing and paying for it, but the fact remains that IT IS NOT YOUR PROPERTY, so you should return it when you are supposed to. If you are too lazy to return it and get hit with a fee, so be it. You SHOULD be hit with one.
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harry, 1 Mar 2007 @ 8:23pm

What About Movielink??
No one has even commented on the Movielink service mentioned here. Actually I don't think it sucks at all. The selection is not great but the actual service works well. Yes you need to first download a small application to manage the downloads, and yes there's DRM involved...but for the rentals this is hardly an inconvenience. It simply "forces" you to return the movie on time (well at least that means there's NEVER any chance of having to pay late fees, cause the DRM expires after 24 hours anyhow).

All that said, Netflix is great. BUT, you can expect that their digital offering will also have DRM, no doubt.
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harry, 1 Mar 2007 @ 8:24pm

What About Movielink??
No one has even commented on the Movielink service mentioned here. Actually I don't think it sucks at all. The selection is not great but the actual service works well. Yes you need to first download a small application to manage the downloads, and yes there's DRM involved...but for the rentals this is hardly an inconvenience. It simply "forces" you to return the movie on time (well at least that means there's NEVER any chance of having to pay late fees, cause the DRM expires after 24 hours anyhow).

All that said, Netflix is great. BUT, you can expect that their digital offering will also have DRM, no doubt.
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Lackluster Employee, 1 Mar 2007 @ 8:49pm

Customers
Blockbuster always has to come out with the next big thing so that its petty employees have to miserably push. Next time you are in a Blockbuster ask the employee if they enjoy selling blockbuster total access to customers. I would say no. Blockbuster loves to add more and more for us to offer customers and then expects us to sell it all. When, in a real world situation its annoying for everyone. So please blockbuster. No more.
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Anonymous Coward, 1 Mar 2007 @ 9:44pm

DivX!
Does anyone remember Circuit City's DivX?

Talk about something that was ahead of it's time.... A DRM module built into a DVD player, plus, everyone hated it as much as DRM.

Someday, DRM will go the way of DivX.
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"ill"duce, 2 Mar 2007 @ 6:51am

Blocksuckster
I live in Dallas, the HQ of this mess. I've lived here five years and each quarter people scratch their heads and wonder how this company stays in business. There have abeen a number of stores closed, they bought a competitor that actually stocked something other than fifty copies of "Bring it on" 12 or Hostel 10, but otherwise, they think they "brand equity" can compete with Netflix.
Block buster is run by CPG people, the people trained only in how to shill consumer goods. That model is based on fuzzy concepts of marketing such as "feeling good" ergo they creat demand for products that rarely have a demand. Example: other than smelliness, was there really a demand for Axe body sprays? There are plenty of other smelly things someone can use, but clever advertising drected at insecurities can do wonders for a product (Escalades.) But Netflix is a service rather than a product. It provides everything people want; convenience, choice, price within a cost model that works. I'm certain Netflix overhead and fixed costs are so low, they could drop their prices substantially and still make a profit. Blockbuster, has tremendous fixed costs in real estate and such.
So, in this situation you have the wrong orientation toward marketing , coupled with the wrong delivery channel. Add some office politics and voila, you have a craptastic business.
But don't get all high and mighty because many of the tech firms suffer from the opposite. They are engineering driven without any concept of true marketing strategy. That's another post.
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Ayal Rosenthal, 2 Mar 2007 @ 11:08pm

Blockbuster suffers from two key factors: reputation and gross margins. Netflix has a terrific customer service reupation; I don't know anyone who subscribes to it that doesn't recommend the service. Blockbuster, as the posts above indicate and from prior experience, does not share that reputation. Add to that the additional expenses associated with having physical facilities with minimal market need (aside from the fact that they're there already and costly to close), the more complicated distribution network that requires, and costly legacy structure, and Blockbuster simply can't compete without completely reinventing itself. I don't know whether this is the correct move for them to do (as opposed to starting such a service on their own) but they need to do something to survive.
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A Mom & Pop Shop, 3 Mar 2007 @ 9:04pm

As the war wages on...
From my standpoint, I have to agree that Netflix has a financial advantage over Blockbuster. Netflix buys warehouses and industrial properties to house their libraries. Even with the extensive search and delivery capabilities, it's still cheaper than maintaining a front end that deals with the customer as a priority. Blockbuster had a nice run, but their lack of customer service in their physical franchise locations is unreal. Most employees have very little knowledge of movies beyond the 'mega-blockbuster', and look like we are disturbing their 'movie time' when we can't find something... My wife and I picked up our video rental because no really delivered whet we wanted. I believe Blockbuster is grasping at straws here. Everyonne is trying to get into movie downloads. I mean, how do you compete with Microsoft now, as they are integrating ip-based television by years end through the XBox 360. Hardware, software, and content?
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A Mom & Pop Shop, 3 Mar 2007 @ 9:50pm

And on...
The studios have tried everything to keep their content from being downloaded in any way, shape, form, or another.
The biggest thing stoping the download revolution is the industry itself. Piracy law makes copying your discs illegal. They have these hugely-strict DRM protocols.
When will the big players realize that they would make more money by allowing cheap downloads, thus mass-market re-penetration? By hitting more consumers for repeat business, and no disc production costs for the added revenue, they could even withstand an increase in piracy and still make a more than sufficient return on investment...
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A Mom & Pop Shop, 3 Mar 2007 @ 10:02pm

and on...
Forget set top boxes. Forget the XBox 360. The falling prices and increased abilities of PC components have made mutimedia and home theater pcs pretty common as of late.
Focus on PC users who have the equipment to download and watch 1080i with 7.1, but are willing to shell out $3, maybe even 5 a movie, because they own it.

Licence a two-copy burn limit if ya have to, but it's theirs once they purchase it.
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Joe, 5 Mar 2007 @ 6:57am

blockbuster won't even sign me up
Blockbuster seems nice. Too bad their website is so buggy that after a dozen attempts and emails, all it does is just create an account without signing me up for any plan. I program websites for a living and theirs is just atrocious. After all that, I chose Netflix. In two minutes, I had signed up and was selecting my movies... which actually got delivered because they allowed me to sign up and pay them! What a novel concept. With this kind of business model, I'm surprised Blockbuster isn't bankrupt yet.
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HAW HAW, 16 Dec 2011 @ 10:06pm

HAHAHAAHAHAHAHA!!
Haha, Blockbuster, aren't they those guys who sell Dish subscriptions?
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