Blockbuster Online + Rewards = Awesome

gigantor1313

gigantor1313

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Right now, you can buy a rewards Membership for $5 instead of $10. It last a whole year and you get a free rental right away and a free rental each month. Also, with every 5 rentals per months, you can rent a new movie or game. I bring this up b/c if you rent from Blockbuster online, you can trade you movies in store and they count towards your rental status.
 
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[quote name='GrilledWitOnions']Exactly. It's no where near the amazingness that it was but it's still the best (if you are satisfied with other areas of service, ie shipping and availability). This why it makes no sense to me that so many people are upset.[/quote]

if they are upset, just cancel their membership. I did, i may go back eventually, but having less time makes it tough to justify something i wont use much, the minimum plan of 1 out, 2 exchanges per month sounds pretty good right now.


The fact is that with the way it was set up before, blockbuster would have killed itself off before too long. I think they are really just trying to break even (blockbuster saw a loss of $38.1 million in Q2, which, divided amongst around 4 million subscribers to the online service, comes to about $10 more needed per person to break even).
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I am a little surprised they havent pulled the plug all together, i never understood how they were making any money through this plan in the first place. Either that, or they should pull the plug on their brick and mortar stores all together, or just turn them all into gamerush stores. Videogames seem to be more of a moneymaker than dvds anyways.

Of course they handled this really poorly (I think being upfront and saying "We are canabalizing ourselves; we need more balance" would have been more effective), but the fact remains that they can handle their business any way they want
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Part of the problem is that the online rental programs are still in their infancy and in the guinea pig stage. So of course they will be tinkering with their plans until they find some formula that makes sense for them and for customers.

The internet hasnt been around that long, and it may be that BB and netflix have enough room in the market to make money.
 
This is from an interview done in May. http://blogs.reuters.com/shop-talk/2007/05/02/qa-with-blockbuster-ceo/

You said that there were no plans to change prices on the program. What is the time frame on that?

A: Specifically, we have no plans of changing the program. What we want to do is go into 2008 with as many subscribers as possible and continue through the course of 2007 to refine our model, sell subscribers more stuff and the focus is on that as opposed to raising prices immediately.
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Guess we saw how that ended.....
 
Yea Brian, that CEO was fired. I would guess he meant what he said.

Actually, I think it is a great business model that he was going after.
1. Drive the competition away.
2. Then you can raise prices.

I would strongly debate the 38mil loss. I doubt this is true loss. This is a number used for tax advantage. I would guess that they are considering a loss as "each Total Access Free Rental." They assume that I would rent the same movie, even if I had to pay for it. So their conclusion is - we are losing that business.

Truth be told - Their product sits on the store. The only reason that I was entering the store to rent anything was because it was free. When I entered the store, than I could be tempted to buy snacks, buy movies/games, rent another movie, pay late fees etc.

This is just a case of switching ideas in mid-stream. This new CEO stinks. He will kill Blockbuster, and I assume he will not make it though 2008. He will be fired also as Netflix takes back a large market share.

Matthew
 
Monday, July 2, 2007
NEW YORK -- Video rental chain Blockbuster Inc. Monday named James Keyes as its new chairman and chief executive to replace current CEO John Antioco, who agreed to leave after a dispute over his pay package.

Keyes was formerly president and CEO of convenience store chain 7-Eleven Inc. His appointment takes effect on Monday, Blockbuster said.

Antioco had planned to leave the company by the end of the year after a fight over compensation with Blockbuster's board.

A turnaround specialist who was at Blockbuster's helm for a decade, Antioco had been under pressure from board members to cut costs rather than invest aggressively in the company's online business to compete with Netflix Inc.

Keyes was the choice of financier Carl Icahn, who was attracted by his experience running a retail store chain and his ideas for the company's digital business, according to a New York Post report.

Keyes' employment contract is for a three-year term, with an annual salary of no less than $750,000, according to a regulatory filing.

The contract also provides for an annual bonus of not less than $500,000 and options to buy up to 4 percent of the aggregate number of Blockbuster common shares and class B common shares outstanding on the effective date.



so now we know where all the extra money is going. he should go back to making slurpee's.
 
I personally never pay for a normal movie at blockbuster. Only time I rent is with a $.99 coupon or free. As far as i'm concerned their stores are already dead
 
[quote name='simpsonps121']Yea Brian, that CEO was fired. I would guess he meant what he said.

Actually, I think it is a great business model that he was going after.
1. Drive the competition away.
2. Then you can raise prices.

I would strongly debate the 38mil loss. I doubt this is true loss. This is a number used for tax advantage. I would guess that they are considering a loss as "each Total Access Free Rental." They assume that I would rent the same movie, even if I had to pay for it. So their conclusion is - we are losing that business.

Truth be told - Their product sits on the store. The only reason that I was entering the store to rent anything was because it was free. When I entered the store, than I could be tempted to buy snacks, buy movies/games, rent another movie, pay late fees etc.

This is just a case of switching ideas in mid-stream. This new CEO stinks. He will kill Blockbuster, and I assume he will not make it though 2008. He will be fired also as Netflix takes back a large market share.

Matthew[/quote]I don't know that I agree. I don't know much about business but I take it to mean they spent more money than they made, not a loss compared to projections but a loss compared to actual money spent.

And I actually like the new CEO more, at least from an employee POV. He's discussed changing uniforms, something I've always wanted (would really prefer business casual), and some other neat things that never, ever were talked about (updating store computer etc). I think he earnestly wants to see the store do well, and understands that takes more than just doing things the same was as before and hoping for good results. And, as far as NF vs BB, with the next price hike a week or so away, I think he's got a good idea, and I didn't see it at first: try to actually compete with NF in a strictly online sense. The by mail only will be $1 cheaper and quicker turn-around with in-store returning. It sucks that it's so much more for the in-store rentals, but if were talking a strict comparison, $1 cheaper is a selling point.
 
I just saw on my local news that Blockbuster.com raised the price again - 3 DVDs out at a time which was $24.99 will now be $34.99 a month. Wonder how many people will cancel now???
 
[quote name='GrilledWitOnions']I don't know that I agree. I don't know much about business but I take it to mean they spent more money than they made, not a loss compared to projections but a loss compared to actual money spent.

And I actually like the new CEO more, at least from an employee POV. He's discussed changing uniforms, something I've always wanted (would really prefer business casual), and some other neat things that never, ever were talked about (updating store computer etc). I think he earnestly wants to see the store do well, and understands that takes more than just doing things the same was as before and hoping for good results. And, as far as NF vs BB, with the next price hike a week or so away, I think he's got a good idea, and I didn't see it at first: try to actually compete with NF in a strictly online sense. The by mail only will be $1 cheaper and quicker turn-around with in-store returning. It sucks that it's so much more for the in-store rentals, but if were talking a strict comparison, $1 cheaper is a selling point.[/QUOTE]

July 2007 article = great post. Thanks for the extra info.

Grilledwitonions - Great input. :) Thanks for the insight. That would be great if he spends more effort on the store and its employees.

As to BB vs NF - Sure, he is still cheaper, and that is a good thing.

BB is testing out $1 a night Kiosks - just like RedBox. - But this shows confusion. Are they trying to phase out the store? Or are they trying to use the store? If Red Box already offers a product, what are you hoping to accomplish?

They are trying to make movies available online. (Once again, many other products out there do the same thing.)

It seems to me the problem is NOT Blockbuster online. It is the physical store. So they either need to close down the store and battle directly against NF, or they need to do something that makes the stores a viable option.

It seems that BB can not keep a solid focus. So they end up hurting themselves by constantly changing mid stream.

Lastly, I think the strongest thing BB has going - is their Blockbuster Total Access. If they lose that, there is absolutely no reason to continue using BB.

Just my 2 cents,
Matthew
 
The thing is netflix's selection online is FAR better, at least with shows i watch and their interface and setup is so much easier to use. They SHOULDN'T try to compete with netflix online. That's like attempting to outmuscle someone who is stronger then you.

They should be capitalizing their stores since thats their competitive advantage, or phase them out all togethor. Instead they are alienating their existing customers who decided to use them for the instore exchanges who will probably be going BACK to netflix now.
 
[quote name='simpsonps121']July 2007 article = great post. Thanks for the extra info.

Grilledwitonions - Great input. :) Thanks for the insight. That would be great if he spends more effort on the store and its employees.

As to BB vs NF - Sure, he is still cheaper, and that is a good thing.

BB is testing out $1 a night Kiosks - just like RedBox. - But this shows confusion. Are they trying to phase out the store? Or are they trying to use the store? If Red Box already offers a product, what are you hoping to accomplish?

They are trying to make movies available online. (Once again, many other products out there do the same thing.)

It seems to me the problem is NOT Blockbuster online. It is the physical store. So they either need to close down the store and battle directly against NF, or they need to do something that makes the stores a viable option.

It seems that BB can not keep a solid focus. So they end up hurting themselves by constantly changing mid stream.

Lastly, I think the strongest thing BB has going - is their Blockbuster Total Access. If they lose that, there is absolutely no reason to continue using BB.

Just my 2 cents,
Matthew[/quote]

Blockbusters have already started to carry gift cards for other retailers, soon they will be selling mp3 players, cell phones, televisions, and computers. Since Blockbuster Music is owned by Transworld, i dont think they'll go that route again, but it should be interesting to see how people will take to Blockbuster as an actual retail store as well as a rental one.
 
[quote name='Bezerker']Blockbusters have already started to carry gift cards for other retailers, soon they will be selling mp3 players, cell phones, televisions, and computers. Since Blockbuster Music is owned by Transworld, i dont think they'll go that route again, but it should be interesting to see how people will take to Blockbuster as an actual retail store as well as a rental one.[/quote]Although it's sort of besides the point, what gift cards has blockbuster been carrying? My store only carries cards for Blockbuster.

And I think people are responding fairly well to the idea of it as a retail store... a couple months back we started selling some big framed-art crap (I think it's way too overpriced for what it is), and it's been selling like mad. We have some 'flip video camera', a low-end entry camera (although we just received it so no telling how that will do).

As for the new CEO not having a well thought out plan, he does. The plan is to seperate more clearly the online and in-store renters, pushing those that don't like the total access price hikes to buy in-store movie passes, and those that prefer online to simply have online by mail, no in-store. It's a decent idea since online was decimating store sales: tons of business and no revenue. It was just really, really, really poorly implemented.
 
Heh , I got an email yesterday saying that my $24.99 a month account (3 out at a time, unlimited instore & NO game/movie coupon)will be raised to $34.99, and my $17.99 (3 out at a time, unlimited instore & 1 game/movie coupon) is being raised to $19.99 a month

I know which account im canceling.
 
I was speaking to the manager of my local BB store and she said that they are supposed to start focusing on reviving the store to what it was if not better. She also said that Blockbuster actually sold it's name to a company who runs the online DVD program. Can anyone confirm this? If it is true I think it was a mistake because this company sucks.
 
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