Discuss Online Movie Rentals

Welcome to Knowzy Old Timer Too. I read your comments regularly over at Hacking Netflix. I'm glad you decided to visit our little corner of the world.

I'm certain over-renting alone is enough for Blockbuster to force you on a new plan. I honestly don't know how big a factor, if any, a lack of purchases weigh into their decision.

It doesn't help that Blockbuster is being so tight-lipped about the subject. Blockbuster Spokesman Randy Hargrove wont reveal the magic formula that results in a forced plan change for "competitive reasons."

I reviewed my notes and found no one from Blockbuster has cited merchandise sales specifically (while high volume in-store renting was specifically cited). I have retracted that claim from the article.

I drew the inference from three public statements:

1. When Blockbuster introduced the Total Access plan last November, among their goals was to improve in-store sales.
2. According to their recent earnings statement, this is not happening.
3. An e-mail from a customer service rep. acknowledged, "in-store activity on a given account" is a factor in forcing customers on a new plan. Note that in-store rental activity isn't singled out.

Time well tell how this pans out for Blockbuster. Between customer defections as a result of the plan changes and the rapid pace of store closings, it will be interesting to see if subscriber growth on their Total Access plan continues.

Thanks for writing and stopping by.

You must have been teased a lot in school with that name!

While Blockbuster certainly has the right to change the terms of their plans, giving some customers preferential treatment while telling others to pay up or don't come back is not good for their public image.

Is it illegal? Probably not. Only a month earlier, Sprint fired 1,000 of its customers that we're eating into its profits.

That's modern corporate America for you: Bottom-line is everything and short on vision beyond the next few quarterly profit reports.

Even with their new plans Blockbuster still has the competition beat in terms of quantity of rentals. As a customer, I wasn't happy with the way they went about it.

I was given 13 days to decide on a new plan before my account was cut off. I was shell shocked. What if I didn't check my e-mail for two weeks? What would happen to my queue and ratings that I spent so much time on?

I took those 13 days to cool off a bit and reflect on the new plans. On the last day, I decided to fork up an extra $7 per month to keep my unlimited plan.

The couldn't have possibly made a profit off of me at $17.99/month. At least at $24.99/month, they have a chance!

It's truly a shame that there are no (legal) online movie services for the Mac. Things are changing pretty quickly in that area, though.

As you mentioned, iTunes is going to soon offer a movie rental service. Shortly after (in 2008), Netflix's Watch Now service is going to be Mac compatible. Blockbuster recently bought Movielink but there is no talk of it becoming Mac friendly.

There is always the illegal downloading option. But even for those so inclined to pirate movies, the hassle and risk of downloading them online makes little sense when services like Blockbuster and Netflix offer cheap, plentiful and high quality DVDs that are trivial to copy.

A very small number of people go the illegal route. As long as the players in the movie biz value their customers, offer reasonable prices and give consumers their fair use rights, that number of people pirating movies will remain small.

If you get a lawsuit going, I'll report about it here. Personally, I wouldn't sign on as a plaintiff. In fact, I'm still a Blockbuster customer.

I think abrupt and punitive notice they sent out to some customers showed a lack of common courtesy. To be fair to their customers, they should have given at least one month's notice. After all, these customers did nothing wrong.

Some, myself included, had less than two weeks to respond before our accounts were terminated. How's that for customer relations!

In your case, this lack of courtesy resulted in a humiliating experience at the checkout counter. Kind of like a credit card declined moment. You did not "go home happy."

But Total Access is a month-to-month agreement that they can change any time. Even if the lawsuit was successful, the most participants could expect is a month's free service.

As for customers sitting back and taking it, we need look no further than the cable TV subscribers! At least in the DVD rental arena, you have several companies to choose from.

Let's suppose a lawsuit was filed. What would you consider a fair settlement?

Blockbuster can't be forced to lose money by putting you back on the old plan. And think how unpopular you'd be if, as a result of your lawsuit, Blockbuster downgrades the rest of their customers to be fair.

The settlement over Netflix's practice of "throttling" was simply an upgrade in plan for one month. If you we're on a 3-out plan, you were temporarily upgraded to the 4-out plan. Total benefit to Netflix customers: Between $3 and $6 (depending on your plan).

The lawyers who brought the case were the biggest beneficiaries of the Netflix lawsuit- they took in around $2 million (I don't have the exact figure handy).

I agree that an attorney may be able to make a case out of this. I just don't think the plaintiffs would see much from it.

And let's not forget that Blockbuster is already being punished by massive customer ill-will.

Point taken.

Your "imagine if" scenario would have made for a good laugh if the situation wasn't so tragic. People with "preexisting conditions" are denied health insurance coverage all the time. HMO's in particular are notorious for denying treatment recommended by a patient's doctors.

If a customer pays for your service, it's not fair to penalize him or her for using it.

Enough with the X-rated Car Talk fake names already. I can't print that, it's filthy!

I can understand wanting to stick it to Blockbuster for their behavior. There may even be grounds to sue.

But if you've really had it with Blockbuster, you can do even more damage by canceling your subscription. And it appears this is already happening on a large scale (we'll know for sure on November 1st).

I'm still waiting for some concise grounds for a lawsuit. George (a couple of posts back) said discrimination charges over letting some people keep their plan and penalizing others. I don't think they gave adequate notice for changing the terms of the agreement.

Maybe there is a lawsuit in one of these behaviors. I'm not a lawyer and I can't evaluate the merit of these claims.

I do know that they shot themselves in the foot with the execution of their Total Access program and the marketplace is punishing them plenty for it.

Welcome to "throttling." Blockbuster and Netflix both play games to slow down "frequent renters."

Blockbuster used to say they would ship the next day in their advertising. They now say "as soon as the next postal business day on their site.

Netflix settled a class action lawsuit over throttling. Now they reserve the right to give preference to less frequent renters in their Terms of Use.

Blockbuster, as well, reserves the right to throttle in their terms and conditions:

Selection and Allocation of Product.

BLOCKBUSTER Online will automatically ship titles to you, up to your maximum number of outstanding BLOCKBUSTER Online Rentals, from and in the order that you have listed in your rental queue, subject to availability. However, BLOCKBUSTER Online reserves the right to determine product allocation among members in its sole discretion. In determining product allocation, we use various factors including, but not limited to, (i) the historical rental volume for each subscriber, (ii) historical number of outstanding rentals relative to the maximum number of outstanding BLOCKBUSTER Online Rentals allowed under a subscriber's plan, and (iii) the average rental queue position of BLOCKBUSTER Online Rentals that have shipped to a subscriber in the past.

The problem, as I see it, stems from not wanting to drop the word "unlimited" from their offer. Instead, they try to push the legal limits of the term unlimited. If they would just say up to X number of movies per month, everyone would have reasonable expectations.

Netflix hates the word throttle and deny they practice throttling. But you, me and lots of other people can attest that both Blockbuster and Netflix sit on your movies for days at a time if you try to rent as many as possible.

I think Blockbuster is a little more obvious about it. They will acknowledge receiving your movie but do not follow up with a new movie for up to three days, in my experience.

Netflix, I find, won't acknowledge receiving the movie until they're ready to send out the next one within 24 hours.

As an individual, your legal recourse against throttling is nil in any practical sense. Blockbuster (and its lawyers) feel they are legally covered in slowing down your rentals.

If it's any comfort, Blockbuster still ships on Saturdays. I just had two ship out yesterday.

Netflix definitely has their act together in terms of their mail service.

I'm curious why the e-coupon alone is so valuable. Do you typically trade it in for a game rental ($6.99 value)?

To be fair to Blockbuster, when they took away the e-coupon, they replaced it with discounted video game rentals for Total Access customers.

Just exchange a DVD mailer at the store for a $4.99 game rental. This is a $3 discount on the typical $6.99 game rental.

Using a discounted game rental counts against your monthly exchange limit. In your case, you can get up to 5 discounts per month.

It may not be enough to keep you. I just want you to have all the facts.

It does make you wonder if the savings they realized by kicking customers off the old plan was worth the ill-will and defections they're causing. I think Blockbuster's mistake was offering such a generous plan in the first place, knowing they couldn't possibly sustain it.

Blockbuster does benefit in quite a few ways if you're not renting from the store. For example, they share rental revenue with the movie studios. When you rent newer movies, Blockbuster still owes the movie studios a little bit of cash, even though they didn't take any money from you.

It doesn't cost them a lot of money when you to rent from the stores but remember you're only paying them $17 a month.

You could benefit by not renting from the stores too- "Blockbuster by Mail" is $1 cheaper (but doesn't include the store option). Not renting from stores also leaves you free to try out Netflix and other online-only movie rental services.

If you think Blockbuster deserves to take a hit for this, vote with your dollars. It seems like perfect time to look at a new service.

You are sooo right! Their FAQ even talks about this discount now.

When Blockbuster first instituted the plan changes in July, they offered $1.99 rentals through September 19th. I guess somewhere between then and now, they made it a permanent feature of the Total Access plan.

Your letter forced me to make a major rewrite of the Lowdown article. In particular, the "Choosing a Plan" section required all new calculations of standard vs. Premium Total Access plans.

This changes makes it much less likely that anyone would want the Premium plan. You now need to rent 22 movies a month to justify the 3-out Premium plan!

Thank you much for the tip!

Just found your website after looking up information regarding the little gem Blockbuster has recently dropped into my mailbox (about an hour ago, no less, thanks for the warning, BB!):

To continue to bring you the unmatched convenience of both online and in-store DVD rentals, your monthly subscription fee will change from $24.99 to $34.99. This adjustment? will go into effect on your next billing cycle on or after December 27, 2007. The benefits of your subscription plan will remain the same.

They just creamed with the previous price increase...and yet, no HD DVD.

Blockbuster is sending a message loud and clear to frequent renters: We don't want your business.

I understand their need to return to profitability but you don't get there by treating your customers like dirt, even if they are unprofitable. Just set the appropriate limits in your plan to ensure a profit.

If a bank was offering ten dollar bills for $5, would they lash out at their customers for taking them up on their offer?

Again, Blockbuster is cherry-picking the customers they like and telling the rest to get lost. Again we are given less than a month's notice and by e-mail only. Did you learn nothing from the Total Access changes less than six months ago?

At their core, the heavy renting customers you despise are just seeking the best value for their money. Even if you were to offer an incrementally better offer than Netflix, you would have these nearly one million customers and make a profit on each one.

But that can only happen if you don't piss these million customers off.

Blockbuster, unless you learn to respect your customers and treat them with dignity, you might as well close up shop now. Nobody wants to do business with someone they don't trust.

This is just one more example of the poor web site design at Blockbuster.com (though Netflix isn't a whole lot better in this regard). The fact that you need to navigate to another page to even see whether a HD version is available is pathetic. Hopefully Blockbuster's upcoming web site redesign will make selecting a HD DVD or Blu-ray disc more convenient.

At the very least, Blockbuster should emulate Netflix's disc preference model. Under your Netflix account settings, you can specify that you prefer titles in Blu-ray or HD DVD. Then, whenever a title is available in your preferred format, the "Add" button automatically adds HD version to your queue.

Blockbuster, of course, has no such preference setting.

Netflix also shows the availability of a HD format on the disc's detail page, though you have to do some scrolling to see it. You'll find it on the left side of the page after the rest of the film details. HD availability is also shown in the search results, though not in the pop-up bubbles.

It would be nice if Netflix had an "Add Blu-ray" or "Add HD DVD" button in the vicinity of the normal Add button. This would make the HD format availability unmistakable. But at least you don't have to go to a separate page all together, as you must on Blockbuster.com.

The fact that, as a "longtime customer," you just became aware of the HD formats shows how poor of a job Blockbuster has done in making these formats prominent and accessible.

I agree that Blockbuster seems to have no ability to empathize with their customers. If you can't get customer relations right, you're bound to end up with no customers at all.

As for the couple you met in the store, I suspect their price was increased by $2. There was never a $19.99 unlimited plan, though there was a $17.99 unlimited. Nonetheless, I understand the fact they are paying a full $15 less per month than other you is infuriating.

I wish you could have quantified "heavy users" with these customers. It means something different to everyone. Do they rent 15 movies a month? 30? Consistently? And how does that compare with your habits?

The BBB has over 300 complaints under Billing Practices, of which 207 customers didn't accept the outcome. Another interesting fact is that they have only been an "BBB Accredited Business" since December 2006 (Blockbuster has been in business since 1985).

Writing to the AG and the BBB could put pressure on them to be more fair. Ultimately, if you don't like they way they do business, you should stop doing business with them.

Customer relations don't seem to be a high priority with Blockbuster Online. The way they handled the price increases. Customer support brining up issues you didn't call about.

I've heard other stories of how finicky Blockbuster is about how you manage your queue! Keep at least 30 movies in the queue at all times. Wait, not that many movies!

Good customer relations entails designing your service around the customer's desires. You don't criticize the people who pay you for the way they're using your service without generating resentment.

Two Different Stores, Two Different Exchange Counts!

Store #1 and store #2 don't seem to be comparing notes. On Wednesday night, my regular store showed 14 exchanges. Thursday morning a different store shows just 1.

By golly, I think you're right! Each Blockbuster store seems to keep its own tally of your monthly exchanges. Once you hit your limit at one store, you can go across town and exchange more envelopes at a different Blockbuster.

I can't believe no one has figured this out. Or, more likely, a few people did figure it out and kept it to themselves.

Well, the cat's out of the bag now!

This may not be a universal thing- it could be a franchise vs. corporate store anomaly. In my case, my regular store is a franchise. The Blockbuster in the next town over is corporate owned.

I walked in to the corporate Blockbuster today with an envelope and picked out a movie. When the salesperson scanned my card, he signed me up for a membership at his store.

I got my rental and receipt. I looked at the exchange count on the the bottom: 1 movie for March (at the other store I had 14 for March)!

Thanks so much for sharing the tip with Knowzy readers. I'm very interested to know what flavors (corporate or franchise) your two Blockbusters are.

No argument here. No matter how you slice it, Blockbuster's online plans are a better deal than Netflix from a financial standpoint.

Today, the savings aren't "plain as day" as they were when Blockbuster was doubling Netflix's offer. But if you "do your homework" as you say, you'll see them.

Of course, I never blamed Blockbuster for raising prices and limiting plan benefits. It was a prudent move that quite likely saved the company from bankruptcy.

As for the way they handled the customer relations aspect of the price increase, well, just read some of the comments on this page!

Wow, a 24 hour shift. That's a long day!

It makes sense to leave Total Access since you can't visit a Blockbuster store. Sticking with that plan is just a waste of money.

To be fair to Blockbuster, they do offer a by-mail only plan for $1 less than Netflix. It's called "Blockbuster By Mail."

On the other hand, their newly unveiled "Downloads" will cost you $1.99 or more per movie at Blockbuster. Netflix's offers a similar Watch Instantly service free and unlimited to its members.

If you're in to watching movies on demand over the Internet, that $1 buys a lot at Netflix!

Ultimately, you just need to look carefully to find what works best for you. And it sounds like you've done a good job.

So you are still getting a free coupon? I'm actually surprised you're getting that! Do you know when you lost the second coupon?

How many in-store exchanges are you getting at this point? Have they limited you to 5 per month or is it still unlimited?

One thing that baffles me about the latest Total Access benefit reduction is this: What does the extra $4 you pay get you?

The "By Mail" only 3-out plans are $4 cheaper than the Total Access plans, but, now that they don't ship your new movie until you return your in-store rental, you get exactly the same number of movie rentals.

Is it really worth $4 per month for the privilege getting a few of your rentals from the store instead of by mail? Perhaps you could make a case for it but it's a stretch.

Then there's the Premium Plans: At $34.99 per month, the 3-out plan is $19 more expensive with the exact same number of movies as the $15.99/month By Mail plan. What a complete waste of money!

What are they thinking? Shouldn't they reduce prices so they are at least somewhat commensurate to the reduced services?

While I'd hate to see job losses in the 10's of thousands if Blockbuster ceased to exist, it certainly seems more and more inevitable.

In March, its shares were halted for 90 minutes after falling 76 percent on word they hired a law firm well-known for handling high-profile bankruptcies. Blockbuster adamantly denies that a filing is imminent.

In April, Blockbuster announced that its crushing mountain of debt raises "substantial doubt" about its ability to continue as a going concern.

Around the same time, they reported to investors they may close all Blockbuster retail stores worldwide.

It's funny you mention renting from grocery stores because that's exactly where you can expect to see Blockbuster next. They have partnered with NCR to build up to 10,000 DVD rental kiosks by the end of 2010.

NCR has bought out the company behind the "MovieCube" and "The New Release" brand that combined operate 2,200 kiosks. Presumably they will be re-branded Blockbuster in the coming months.

While they were testing older machines in Papa John's and Family Dollar in Kentucky, there's no word yet on what retail outlets may host the NCR kiosks. However, Blockbuster CEO Jim Keyes once ran 7-Eleven, so he may be able to pull some strings there.