Wednesday, June 22, 2005

The BoneHead Move By BlockBuster

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.

2 comments:

Anonymous said...

I agree. They could have come up with something much better that would not compromise customer loyalty. The same thing happened to me and I finally went to Hollywood. Why do they have to be so greedy anyway? Why not just lower late fees to under the competition? Extend the time, but don't completely remove it!

Also, their idea to resell videos at "double or triple that price" from $3 and up is all the more greedy. You can buy DVDs for $10 NEW at Target and other mega retailers. Why do they need TRIPLE the price? What ever happened to 20-30% markup? They have thousands of stores to move them and if they are more competitive, people will buy more. What's more important, is that they will not feel cheated. All they want to do is shuffle numbers, why not pay attention to consumers? Become a business for the consumer and not the shareholders or cash out now. We won't stay around much longer.

Scott Shaffer said...

7/4/2005
Netflix plans VoD service by year end

that didnt take long.