Blockbuster loses a customer

Out west (in Utah, at least) a little upstart rental company called redbox is giving Blockbuster a run for its money.  The concept is simple: set up DVD “rental stations” similar to vending machines outside of popular locations like McDonald’s restaurants and Smith’s grocery stores.  Charge folks 99 cents per rental per night, with the rental automatically converted to a sale after 25 days.  Stock the machines with tons of new releases (since those tend to fly off the shelves most quickly), toss out a free rental code or two every so often, and voila!  Instant phenomenon.

I remember when redbox began its test market trial run in the Salt Lake/Utah County area a few years back.  It didn’t take long for word-of-mouth to spread about this neat little vending machine outside the Mickey-D’s that let you watch movies for a buck a night.  Soon the lines to get at this machine stretched far into the parking lot, and it was regularly out-of-stock of the most popular releases.  What to do about that?  Why, add another kiosk, of course!  And so the “redbox craze” spread like wildfire up and down the Wasatch Front, such that when we left Provo back in August you could find one (or multiple) redbox kiosks at nearly every McDonald’s restaurant and Smith’s store around.  And both of those businesses are pretty popular by themselves.

Blockbuster was losing ground fast.  So we began to see an increase of free rental or reduced-price rental coupons in the mail and on the Internet.  Then the company announced a radical restructuring of its business: every rental in its stores would be priced at $2.99 and could be kept by customers for 7 days before it was due.  Though this represented a price increase for non-New Releases (or “Blockbuster Favorites,” as the chain prefers to call them), it was a pretty big price decrease for New Release rentals, which typically hovered around $3.99 for a 2-day rental (the newest New Releases) or a 5-day rental (the older New Releases, which could include some pretty old “new” movies).  The new pricing system, combined with the chain’s “No Late Fees” policy, meant you could pay $2.99 to hold on to a movie for 14 days without incurring the dreaded “restocking fee,” or in other words, the non-“late fee” late fee.

I’m not at all big on TV, with the exception of two cable stations: BYU-TV and Turner Classic Movies.  And Cassia only cares about BYU-TV.  So when we were weighing various cable/satellite options before we moved to Atlanta, we both balked at the premiums that Comcast, DirecTV, and Dish Network wanted us to pay for access to both stations.  Hmm . . . $60/month for two stations we really care about, a small handful of channels it might be useful to watch from time to time, and dozens upon dozens of channels that are utterly useless and/or offensive to us.  Or – we could spend a few dollars more per month for AT&T’s fastest DSL option, skip the cable altogether, and spend $7.99/month for Blockbuster Online’s 1-out-at-a-time, 2-DVD-per-month pricing plan with 2 free in-store exchanges per month.  (What the latter term means is that instead of dropping your DVDs in the mail, you can return them to your favorite Blockbuster store and get a free rental of your choice right then and there.  What great instant gratification!)  Hmm . . . four movies a month for roughly $2 each, with access to those “deep catalog” titles I love so much on TCM?  SOLD!

All was fine and dandy until I did my first in-store exchange out here in Acworth.  School was ramping up and I was short on time, so the DVD sat on my shelf for several days.  Before we knew it, we were getting reminder calls from Blockbuster telling us to return our overdue rental to its store pronto.  That seemed odd – it hadn’t been 7 days yet!  And what was with our store’s pricing policy – $4.49 for New Releases?!  It made me ever more grateful for the sweet deal we were getting with the online service.  I told Cassia, “I will never, EVER, pay full price for a Blockbuster rental from that store!”  I thought that maybe its pricing and terms were different from the ones out in Utah because this was a franchisee-owned store as opposed to a corporate-owned one.

But I soon discovered that the “old” pricing and rental tier structure were actually the norm in this part of the country.  A little research uncovered the truth: Blockbuster can get away with those shenanigans because redbox is practically nonexistent in Georgia.  There’s a single kiosk inside each of the two Wal-Marts within 5-7 miles of our home.  But they aren’t in any McDonald’s restaurants, and demand for cheap rentals is pretty tepid around here.  With the lack of any real competition, Blockbuster feels free to gouge people whatever it wants.  And the ignorant masses seem content to pay it.  How sad.  But at least we were getting a great deal!

Well, that all changed a little over a month ago, when Blockbuster announced it would be raising prices on “some” of its online plans.  Everything I read from news sources online indicated that only the more expensive, multi-disc plans (3+ DVDs-at-a-time) would be affected and that those subscribers would be notified of the price increase by e-mail.  When I checked Blockbuster’s own site after the increase took effect, I was happy to see that our little wimpy 1-disc plan sat rock-solid at $7.99/month.

Then a few weeks ago, Cassia was doing finances and noticed that Blockbuster had charged us a few dollars more than they usually did.  I checked my account, and sure enough, those little boogers had raised our price to $9.99/month, and this right before our billing date.  No e-mail or nothin’.  I was ticked.  So I did a little shopping around.

I had been a Netflix guy long before Blockbuster Online came into existence.  I was doing the 3-DVDs-out-at-a-time plan, but before long I had run out of movies I was interested in seeing, and my finances were simply too tight to justify continuing with the program.  But now I was interested in seeing what they could offer to counter Blockbuster’s free in-store exchange program, which I have to admit is a pretty sweet deal.  Lo and behold, for $8.99/month I could get their 1-DVD-out-at-a-time program, but with unlimited DVDs per month and unlimited access to streaming movies on their website (7,000 movies and growing), a nice counter-move to Blockbuster’s instant gratification exchange program.  It took me about two seconds of thought before I switched.

I was ready to cancel Blockbuster right away, but since we’d just paid for the new month I figured we might as well use it (and like Netflix, they don’t do pro-rated refunds of unused days of the month from the time you cancel your subscription; they just stop sending you movies and keep your money).  Flash forward to last Thursday, when it came time to cancel my Blockbuster Online service before they billed us again.  At the end of the cancellation process there’s a large text box provided to you so you can explain why you’re leaving, if you want.  I typed out a cordial but clear explanation of why I was leaving (abrupt increase in price with no notification, Netflix offers more for a dollar less, etc.) and hit “Submit.”  I’m greeted with this message:

Error: Your message cannot be more than 255 characters in length.

Well that’s dumb, I thought.  Why did they give us so much space to write then?  I pared down my comments to two succinct sentences and tried again.

Error: Your message cannot be more than 255 characters in length.

Thoroughly frustrated by now, I erased everything I had written and typed, “I would tell you why I’m leaving, but your website won’t allow more than 255 characters.  You must not care very much about customer retention.”  And that was that.

So far, I’m thoroughly enjoying Netflix.  I’m getting the movies at the top of my queue much quicker than I was with Blockbuster, plus I’m saving time and gas from not having to drive out to Blockbuster to exchange/return rentals.  There’s a Netflix distribution center within 45 driving miles of our house, so I get rental turnaround within 2 business days.  Even better, if I drop a return in my mailbox on Saturday and have a movie at the top of my queue that’s due for release the following Tuesday, Netflix will process my return and send out the new release on Monday, so it’s in my hands at the same time everyone else can get a hold of it.  Sweet!

In fact, there’s a new Netflix envelope waiting for me at home right now, a documentary called “In the Shadow of the Moon” that combines new interviews with the Mercury, Gemini, and Apollo astronauts with never-before-seen NASA footage from space and the surface of the moon.  Today is its date of release on DVD.  Roger Ebert gives it four stars, and I’m really looking forward to checking it out.  Thanks Netflix!

So, now I’ve become the anti-Blockbuster guy.  Seriously, either redbox (if it’s in your neighborhood) or Netflix is a much better deal for your money, especially if you’re a busy person like me with not a whole lot of time to watch stuff on TV.  Of course, not having satellite or cable helps too.  :)

(If you’re a Netflix subscriber, feel free to check out my queue [see the link on the right sidebar] and star ratings of movies I remember seeing.  I can always recommend a good movie for anybody who’s in the mood for one.)

2 Responses to “Blockbuster loses a customer”

  1. NICE! Steve and I like reading your rants :) Way to stick it to ’em.

    Oh, I tried widening my columns, which was easy, but Blogger technology isn’t smart enough to adapt. If I would have left it like that, I wouldn’t be able to change my banner because the “edit” button was shoved past the viewing window. I should really learn more HTML so I can make my own flippin’ website :)

  2. Totally off-topic, but what the heck . . .

    HTML is a very easy to learn language, but the problem is it’s static. That was alright back in the early to mid-90’s, but static pages just don’t cut it today. To build a site with the functionality of Blogger, you need to learn a dynamic language like PHP or ASP (Microsoft’s version), have access to an online database like MySQL or PostgreSQL, and probably know a thing or two about Linux. See why most people just go the free route?

    That said, I think WordPress is a much better API than Blogger because it’s easily and infinitely customizable. I started out with a Blogger site, but when I saw what WordPress could do, I switched over in a heartbeat. For one thing, I hated having that blue Blogger bar at the top of my page – I wanted to control exactly the amount of advertising I wanted on my site (namely, none). And there were other reasons, most of which I’ve forgotten because it’s been over two years since I switched. I haven’t looked at Blogger since, and I’m sure it’s functionality has improved, but I’m firmly in the WordPress camp now.

    Maybe one of these days I should do a post comparing WordPress to Blogger, with screenshots of all the neat-o things I can do from my admin panel, like make my margins bigger without throwing everything out of whack. :) If you’re a fine-tuner like I am, and a bit more techno-savvy than the average bear, I think you’d love WordPress. And if you want to take the extra step, you may want to consider (very cheap) paid hosting for your site, as we do. We think the benefits are well worth the $3.99/month. :)

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