From MSNBC.com Rewinding A Video Giant
Blockbuster is under attack from all sides. Online competition and video-on-demand threaten a well-known brand. They are being attacked by their own dumb marketing.
In its most controversial (dumb) move, in January Blockbuster stopped charging customers late fees. Well, sort of. Customers can keep a movie without penalty for more than a week—more than twice the old rental period. But after that, Blockbuster's new system assumes they've decided to buy it and automatically debits their account for the purchase price minus the rental fee. (Customers who balk can still return the DVD within 30 days for full credit, less a $1.25 restocking fee.)
For a few weeks ago I tried renting Meet The Fockers to no avail. Every time I went in to a BoneHead Video store they were out of the movie.
I then realized why. With their new rental policy I can pickup any movie(providing it's available), pay the rental charge, keep it for a month and be charged an extra $1.25.
They have reduced turnover for that movie, allowed me to let a few of my friends borrow it and watch it for a month, and made sure all first run movies are never available.
Who was the brainchild behind this campaign?
It did do one good thing though. BoneHead Video forced me to use my Adelphia DVR. So for 3.95 I saw Meet The Fockers and didn't have to return it.
Some businesses never adapt and die. Some use bad business decisions to speed the process up.