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story category Blockbuster's Failure To Embrace Broadband Costly
Netflix, Redbox and VOD of course didn't help...
08:47AM Thursday Sep 17 2009 by Karl Bode
tags: Video · business · content
It has been interesting watching Blockbuster video adapt to the broadband age, with the company seemingly not trying very hard out of fear of cannibalizing their brick and mortar revenue. Early efforts to mirror Netflix's success at broadband video delivery have seemed relatively lackluster, and the company's CEO, when announcing such broadband initiatives, seems to almost expect them to fail. But the company's also struggling with debt, cable VOD, and outfits like Redbox and Netflix -- leading Blockbuster to tell the SEC they'll be doubling the number of upcoming store closures. Blockbuster says 18% of its stores are unprofitable, and 47% more are only "mildly profitable."

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Forums » Blockbuster's Failure To Embrace Broadband Costly
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axus

join:2001-06-18
Washington, DC
·Verizon Online DSL

video stores used to be a radical idea

Didn't the movie studios complain that video stores would kill their industry? I think the new forms of delivery will be net positive for the movie studios, of course Blockbusters days are numbered. The "high end" customer will use digital delivery, those who can't will use Redbox and their imitators. Blockbuster made sense because VHS tapes were too bulky to cheaply mail or replace.
russotto

join:2000-10-05
Collegeville, PA

DVD by mail

Blockbuster does have a DVD by mail option as with Netflix. I think that accounts for a lot more business than broadband for either company.

unknvoip
WWJID?

join:2006-07-25
Rochester, NY
·ViaTalk

Re: DVD by mail

Blockbuster had me as a loyal and evangelical customer with their Online mail/brick&Morter combination service when it started. Then they started to de-feature it and raise the price. Finally I left. Then the local store doubled the price for their rentals. I am now a happy Netflix customer and it looks like I am not alone.

ChrisDG74

@qcrepro.com

Re: DVD by mail

Exactly. I signed up back in 2004. Within a year, the regualr price had jumped 33%, along with the fact that they were removing "features". Dropped them like a turd and haven't looked back.

dcurrey
Premium
join:2004-06-29
·ViaTalk


1 edit
Didn't they grandfather your plan in. I am still on the original plan they offered. More or less

$19.99 / month (plus taxes)
3 at-a-time, Unlimited mailings
Unlimited In-Store Exchanges
+ 2 FREE bonus Movie or Game Rental E-Coupon / Month

Think the price went up a few dollars looking in Quicken I started paying $16.04 with taxes and now pay $21.29 with tax.

They did add the In store exchanges later. Think I have one of the few accounts that have in store Game rentals coupon.

SLD
Premium
join:2002-04-17
·Comcast

I wasn't much interested in them as Blockbuster basically killed off all of the independent rental stores that provided better service and content.
But then, Blockbuster really did a Walmart and started under-ordering copies of new releases, making it nearly impossible to get something worthwhile each visit.
Yuck - what a nightmare!
jazzlady

join:2005-08-04
Bartonsville, PA
·ProLog

said by unknvoip See Profile :

Blockbuster had me as a loyal and evangelical customer with their Online mail/brick&Morter combination service when it started. Then they started to de-feature it and raise the price. Finally I left. Then the local store doubled the price for their rentals. I am now a happy Netflix customer and it looks like I am not alone.
I used to rent quite a few movies from Blockbuster, and another local place.

I finally got fed up with the ridiculously high rental costs for DVD's.

Just to put this into perspective- and I'm talking brick and mortar stores- NOT online/mail- way back when people were renting VHS tapes, the average fee for a new release was $2. Older movies were generally $1. New releases generally cost around $100 to buy.

Now we are in the DVD generation, and the average cost of a new DVD is less than $20, yet it costs $4-5 to rent.

That's 20-25% of the purchase price.

Once this fact occurred to me, I stopped renting. The high prices, coupled with the gas to get there and back, just wasn't worth it anymore.

I would love the online Netflix option, but with my ISP's *generous* 80 GB monthly cap on my 15 Mbps connection, I can't do it.

It's stuff like this that forces people into piracy, and these companies better wake up and realize that the old business model is as dead as the Dodo....

bionicRod

join:2009-07-06
Jefferson City, MO
·Mediacom

I've been a Netflix customer for years now. They have a great service that I don't mind paying for every month. I don't feel bad for these huge rental chains of brick and mortar stores. Someone else pointed out the ridiculous cost of renting nowadays, and they're right. Turnaround time for Netflix to my house is generally 2 days with no movies. I'm on the 2 at a time plan. That means I can watch two Blu-Rays on Monday, have another two on Thursday, two more on Monday, and so on. What's that, eight or nine movies a month for the $25 I'm paying (including the $3 blu-ray charge)? That's not counting the streaming movies either (and I use that service often, even though I sometimes have trouble finding something I actually want to watch).

Movie Gallery here charges almost five bucks for a DVD. Blu-Rays are more expensive. Netflix is just a vastly superior way to rent movies. I never signed up for Blockbuster's mail delivery; they never gave me a reason to switch from what I knew was an excellent service.
rick1991

join:2003-01-22
East Fultonham, OH

Store closures

Apparently the store near me was one of the "unprofitable" ones. I just happened to notice the other day when I was driving by that they had closed down. I actually laughed about it, because big bad Blockbuster is out of business while the small local shops are thriving.

PhoenixDown
-- Wants FIOS
Premium
join:2003-06-08
Fresh Meadows, NY
clubs:

Re: Store closures

They already closed one blockbuster near me -- and I loved that location because they had EVERYTHING!

If they close the other store near me, we will be canceling two blockbuster monthly accounts and going to Netflix.
--
~ Insert a Funny Sig Here ~

60529262

join:2007-01-11
Chicago, IL

Re: Store closures

Blockbuster is closing 960 more stores. It's a pretty good bet they'll all be gone by the end of next year.

Simba7

join:2003-03-24
Billings, MT
The 2 here in Billings are now closed. The one in the Heights closed in February and the one on Grand closed on the 13th.

The one on Grand sold everything for $5 each. There was a massive swarm of people on the first day.
AstroBoy

join:2008-08-08
Parkville, MD

Blockbuster's DVD by mail was a fail.

Maybe 3 years ago I wanted to sign up for the DVD by mail service. Sounded great that you could swap some DVDs at the store. But I tried to read and understand the rules and it was too confusing for me. I then looked at NetFlix and their rules were simple. So, I went with NetFlix.

I also know some people that did not read the rules and signed up for Blockbuster's DVD by mail. When they tried to swap DVDs at the store they were refused. They switched to NetFlix.

SLD
Premium
join:2002-04-17

Re: Blockbuster's DVD by mail was a fail.

I was able to swap a mailed DVD in-store, but then that DVD could only be returned.
Anyway, I convinced my wife to stop using BB and get a NetFlix account.
Sammer

join:2005-12-22
Canonsburg, PA

1 edit

Netflix is what's really killing Blockbuster!

It's not broadband (at least not yet) but the fact that Netflix does by mail so much better.

cableties
Premium
join:2005-01-27

Re: Netflix is what's really killing Blockbuster!

Oh, try counting all the Xbox 360 owners, and Roku owners that can stream Netflix films along with the Rentals...its gaining. I know, I signed up to do the Xbox-Netflix gig and I am loving it.
--
Splat

r81984
Thread is
Premium
join:2001-11-14
St John'S, NL

Re: Netflix is what's really killing Blockbuster!

How is that?
Are there any restrictions or can you watch any movie?
And, how many can you watch a month?
--
Democrats are not Socialists any more than Republicans are.
Madtown

join:2008-04-26
Madera, CA

Re: Netflix is what's really killing Blockbuster!

I have Netflix on my Xbox 360 and I like the Instant Watch feature, granted not all movies are available for IW, but it's worth my $8.99 per month AFAIC.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ

said by r81984 See Profile :

How is that?
Are there any restrictions or can you watch any movie?
And, how many can you watch a month?
netflix throttles, thats their gotcha!
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

60529262

join:2007-01-11
Chicago, IL
And TiVo owners....

JasonOD

@comcast.net

Blockbuster thought they had it right.....

and rightfully so. Who would have thought downloading full-length movies would be gaining foothold. With Ed (my pipes) delivering a warning shot to potential VOD freeloaders on behalf of ISP's a few years ago, studio reluctance, technology limitations, uneven broadband availability, it's amazing the movie download model is in existence.

Obviously Blockbuster is paying the price now, but it's hard not to wonder why ISP's have allowed VOD to become part of the mainstream internet for consumers.

BlitzenZeus
Burnt Out Cynic
Premium,MVM
join:2000-01-13
Beaverton, OR
·Verizon FIOS
·Verizon Online DSL

Blockbuster lost me at late fees

Years ago they had short rentals, and if you were one day late you were charged basically you paid for the rental for being late after the time, however I proved at my location multiple times the employees were too fing lazy to check in the items in the bin before they were due. I told them to f off, and they could collect the late fee from the employees.

Practices like these are what screwed them, companies like redbox got it right, a buck a day, simple, and you own it after so many days.
--
My hourly rates:
$25 per hour.
$35 per hour if you want to watch.
$45 per hour if you want to help.
$75 per hour if you tried to fix it, and failed.
$125 per hour if you called tech support, and didn't fix the issue while making things worse

Hpower
Roflmao

join:2000-06-08
Glendale, CA

More stores closing...

Why aren't they filling for bankruptcy? They are done already. Just close the doors already.
--
The Internet is about to go down....it is actually.
Sammer

join:2005-12-22
Canonsburg, PA

Re: More stores closing...

said by Hpower See Profile :

Why aren't they filling for bankruptcy?
Because 82% of their stores are still profitable although some probably just barely. They really need to be more ruthless and shut down closer to 1200 stores within 6 months or your prediction of bankruptcy may become reality.
Asmodeus

join:2004-05-26
Spring Valley, CA

Outside of the fact...

that they are manned by retards and the ability to not discern when a returned DVD isn't late is why I don't go there anymore and have wholeheartedly adopted netflix. Sure, netflix has it's issues, but I can live with them.

geese

@twncorp.com

as long as the ones by me stay open

I use to have 3 by me ( within 5-10 miles) and they closed one of the stores but I still have 2 near me with in 5 miles and that's just dumb.

I love my BB online though I pay $20 for 3 at a time and unlimited exchanges at the store and a free game a month. I rent 20-30 movies a month it just sucks they changed it so now I can't have a movie from the store AND have one getting mailed to me like they use to. Still a better deal then Netflix to me ( my roommate has netflix).
sonicmerlin

join:2009-05-24
Cleveland, OH

Re: as long as the ones by me stay open

I wish I could be the CEO making millions to neuter the company by reducing features on their most popular services.
AstroBoy

join:2008-08-08
Parkville, MD

Blockbuster.com

I just looked at blockbuster.com. In about 2-3 minutes I could not find what plans were available or how much they would cost. I assume you must click "Try it free", but I don't want to try, I want to know how much it will cost first.

Oh, I just found it. You must hit the subscribe button, but I did not want to subscribe, so I did not click it. Anyway, they should have a "How much does it cost" button!

Without the VOD like Netflix they can't win.

C0deZer0
Oc'D To Rhythm And Police
Premium
join:2001-10-03
Davenport, FL
·Verizon FIOS

Would be nice...

if there was somewhere to rent games around here to begin with. Closest Blockbuster location I know to me is still ~20 miles away. That's simply too far out of the way (and into a part of town I don't have reason going to to begin with) to bother renting from.

Some of you will no doubt mention Gamefly, but last I understood, they and Netflix both did the same thing - prioritize your orders when you're a new customer, but after a while, you can't get shit in for months at a time. and I doubt I'd rent games often enough for such a subscription service.
--
Front Line Force Fortress Forever
Eek2121
Lovin Verizon FIOS

join:2002-10-12
Flanders, NJ

Business is flawed

Blockbuster's issue is that they are driving themselves out of business. Their prices have been inching up dollar by dollar. They've also refused to embrace the model that would Ultimately save them. (Unlimited movie rentals from brick and mortar stores, no coupons needed). Instead, they continued a per movie charge model, but eliminated the late fees. I've kept movies from block buster for months and only had to pay a dollar upon return. With a business model like that it's no wonder they have issues.

Instead, they should charge a couple bucks more than netflix, give users unlimited exchanges in store, and eliminate the per movie charge altogether.

tmh

@verizon.net

Not even missed

I didn't realize our local Blockbuster had closed for more than 6 months until I noticed a banner advertising the opening of a new bookstore where Blockbuster used to be.

IMO, the bookstore was a better use of space.
Forums » Blockbuster's Failure To Embrace Broadband Costly


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