Blockbuster Does Subs
And then, along came the Internet and Netflix, which has been renting DVDs to customers via its Website and the US mail for the last few years, with growing success. The company claims over a half million subscribers, mostly concentrated on the West Coast, who pay a monthly subscription fee to keep a specific number of movies out at any one time. When you finish a movie and send it back in, you are sent a new one. There are no late fees, but the notable downside is not being able to get a hot new movie that is in high demand or not carried by the service.
Blockbuster hopes to combine the best of the traditional video rental model with a Netflix-like approach within its brick and mortar storefronts through a new subscription service the company is readying for launch. The company says it will first test the subscription approach to DVD rental this summer at two of its locations.
Blockbuster says that rent would be charged between $19.99 and $29.99 per month for an unlimited number of rentals as long as they didn't have more than two to four titles out at any one time. An alternative program being considered by the company is a "no late fees" subscription at between $49.99 to $59.99 per year that would allow customers to rent movies at the typical $3.99, but not have to pay any late fees as long as they didn't have more than three movies out at a time.
Blockbuster's John Antioco says that customers are "not particularly crazy about extended-viewing (late) fees. What we've done is developed a model that we believe provides the consumer an opportunity to take home more movies than they normally do, keep them longer, and still spend more money with us than they would otherwise."