The Blockbuster Video Scam
 

For those of you who don't know, Block Buster's no late fee policy is a bit of a scam. The fact is, if you hold onto to the movies for a certain period of time, you have to buy the entire movie!

It's not a scam, just a business practice. You agree to the terms or you don't. They're not hiding anything from anyone. If you keep the movie longer than a week overdue they charge you for the movie. Seems pretty straight forward to me. Just because it's a business practice you don't like doesn't make it a scam.

Netflix has a true policy of no late fees, Block Buster doesn't. But Block Buster doesn't advertise it that way, that makes it deceptive advertising. With Netflix, you can keep the movie as long as you want, without having to worry about paying any penalties. If what Block Buster is doing is legit, then they wouldn't be investigated by attorney generals.

http://rds.yahoo.com/S=53720272/K=Bl...ockbuster_dc_3

I agree that the advertising is deceptive, but, come on, man... yeah, Blockbuster has decided to do away with the one thing that makes them ANY MONEY AT ALL. Get real. I knew there was a second face to all that campaigning immediately.

I'm no big fan of Blockbuster, but I agree that by now you should know there's no such thing as a free lunch. And it's really comparing apples and oranges when you talk about Netflix, that's a completely different kind of service from rentals at your neighborhood bricks and mortar store. But if that's what you want, Blockbuster is also offering the same sort of thing http://www.blockbuster.com/homepages...onOffer.action

Copying the Netflix business model might not be such a great idea however; in the past year their stock has gone from about $35/share to $11... http://finance.yahoo.com/q/bc?s=NFLX...off&z=l&q=l&c=

Well a few months of a stock drop is by no means an indicator of a company's long term success. Netflix is slowly becoming a very recognizable name, and if revenue vs. advertising expenditures doesn't add up in the short term, it definitely doesn't mean it won't add up in the long term.

Plus there are many techniques used by savvy CEOs for artificially driving up and driving down stock prices to coincide with corporate strategy. I wouldn't put too much weight on a stock chart at this stage.

I have never used Netflix as I am too impulsive when it comes to what I want to watch on any giving day; one day I am in the mood for WW2 and the next some Undead films. I'd hate to have them send me that OMEGA MAN DVD when all of sudden I get into the ROAD WARRIOR vibe.

Blockbuster I decided a while ago isn't for me; their selection of films is horrible. I goto Hollywood Video as they have tons of films that BB just does'nt have and I have noticed in comparison to my neighborhood? The employees at HV are much more customer service oriented than the BB crew.

True Imran, stocks go up and they go down. Hard to tell where this one will settle. Name recognition is great, but not enough in and of itself: case in point is TiVo. A recently article in Barrons suggested that the verb to TiVo might well last longer than TiVo the company ;-)

I'm like you John, can't imagine locking myself into a video rental decision in advance. Are you aware that Blockbuster is currently involved in a hostile takeover bid for Hollywood Video? http://biz.yahoo.com/ap/050212/block...llywood_2.html

I think all these rental places are in for some hard times considering that you can purchase a DVD for the cost of two or three rentals. If you keep an eye out for sales you can find a lot of titles for under $10. This is often what I'll do if it's a good film that I know I'll want to watch again someday. The other day I was in WalMart and they had a rack of classic DVD's for $1.00 each. I picked up an old Kirk Douglas film and the quality was surprisingly good.

The true selling point for me for Netflix is the selection. It's just unparalleled. And I guess they must have expanded recently, because items on the cue come next day now, in the Orlando area.

Netflix is definately kicking butt, after all, that's the entire reason why Blockbuster thought up this scam in the first place (read: deceptive advertising.)

I personally love what blockbusters doing. No one ever remembers to get the movie back on the right day- this gives you a week of extra time after the original rental period.

If you decide to keep longer than a week after your rental period is due you are charged the entire price for the movie. However if you return the movie within a 30 day period you will be refunded the price and only charged a 1.99 service fee.

I don't rent enough or regularly to justify going to netflix or bb's monthly service - however just like today when I returned napolean dynamite even though I rented it a week and a half ago - I won't get charged.

I give kudos to blockbuster for being a little risky with their business strategy. Be interesting to see what hollywood video, movie gallery, ect do.

<<<-- Originally posted by Brandon Greenlee : If you decide to keep longer than a week after your rental period is due you are charged the entire price for the movie. However if you return the movie within a 30 day period you will be refunded the price and only charged a 1.99 service fee.-->>>

Still, this is a far cry from "NO" late fees! Which is the scam they are selling. I hate Blockbuster, haven't been to one in many years, have no plans to do so again.
NetFlix on the other hand is a very fine service, as long as they keep expanding. When it was brand new it was terrific, now it's more popular and the movies are arriving more punished and occasionally unreadable but that's not too often, they're just a lot dirtier nowadays. (fingerprints and such, not content, get your mind out of the gutter)

Stock price is a bunch of crap. It doesn't mean anything. The stock market is such a joke these days (and has been since the dot-com boom), you couldn't judge a wet t-shirt contest on the rational of todays stock market much less a companies performance. Hell, someone could fart and send a stock through the roof (or floor)!

<<<-- Originally posted by Boyd Ostroff : I'm like you John, can't imagine locking myself into a video rental decision in advance. -->>>

Exactly. I used to be real bad about purchashing; I have olmost a hundred DVD's I think; most are of what I really really want (The Godfather I and II, Jaws, Scream, The Road Warrior, The Thing, Apocalypse Now, Platoon, Saving Private Ryan, Band of Brothers, INDY and Star Wars, Galdiator, Braveheart; well, you get the point!)

I have since tapered off on my DVD spending sprees and now put some thought into whether or not I want it but I agree; I can buy for usually $14.99 and watch till my hearts content and then turn it back in at my local 'Gamestop' for $7.00. It's like renting indefinatley for $7.00.

the problem with impulsive rentals is regret. $5/DVD is MAD MAD expensive in a world that offers online rental. for the price of roughly 4 DVDs you rent @blockbuster you can rent 24 DVD titles a month. it's pretty a much a no brainer. it's similar to how people spend money on plasma or LCD displays when they can buy front projector for less than the price of one and have 250"+ screen estate... but some people... will NEVER learn =).

i used to have impulsive rental syndryom (IRS) but we are humans and our behaviors can be corrected. i have 500 movies on que... and i'm stuffed full of films everyday (i have 8 out a time ordeal). you can switch your IRS behavior into selective viewing decipheration (SVD) when you have something like netflix because instead of feeling impulsive you now have to choose which titles to watch FIRST and not worry about WHAT or WHEN to get it.

<<<-- Originally posted by Yi Fong Yu : the problem with impulsive rentals is regret. $5/DVD is MAD MAD expensive in a world that offers online rental. -->>>


Wow... my local blockbuster rents for 2.99.

Yi, the point is that we don't all see the world through the same eyes. I agree that $5 rentals are excessive which is why I seldom get them. But every now and then I'm willing to pay a premium for convenience. I'll bet that in the past year I've only rented 5 or 6 DVD's from Blockbuster anyhow. But if you want to be "stuffed full of films everyday" then of course your approach makes a lot of sense.

Now the projector vs the plasma screen is not nearly so straightforward. Not everyone wants to cower in a dark room watching video! There are image quality issues to take into consideration and "size isn't everything." Really, you're just going to be sitting farther away and looking at bigger pixels with a projector. I just got a plasma screen myself and am very happy. I have it in a location where a projector would never make sense, in the corner of a glassed in porch that has a terrific view. It isn't like a "screening room," but is a very pleasant place to relax and enjoy a film or even some mindless TV program. This probably wouldn't be your choice, but I like it. I do agree however that the price on the newer projectors makes them an attractive alternative if that's the kind of viewing style you like.

I remember when bb used to not assess late fees if you returned the movie before close of business on the due date. Then some shark in their organization came up with the grand idea that the movie had to be back at noon, knowing full well that working people wouldn't be able to get there until after work so they essentially shortened the viewing time by one evening and collected many more late fees in the process.

While I'm on my soapbox, I had a credit card company that recently decided they weren't collecting enough of those now horrendous late fees assessed the day after payment due date (another post 9-11 low interest rate revenue generating scheme). Their solution is to 'alter' the actual due date every month in order to trip people up. Of course they state that it's up to you the customer to be 'aware' of this different date each month, like I have nothing better to keep track of. Needless to say, I called them and closed the account. They couldn't fathom why a good customer with a zero balance would object to such a policy. Some companies just don't get it anymore. And that brings us back to DV-INFO where Chris has found us GREAT SPONSORS who don't use these kinds of tactics and poor customer service relations.

Whew...I feel better now.


regards,

-gb-

Having had many bad experiences with BlockBuster including snafus with late fees, bad managers, gum-popping employees completely unknowledgeable about the films they carry, poor (and censored) selections, and general shoddy business practices like the one mentioned above and more, I'd burn them in effigy if I could. But I'll just settle for never using them again and calling them by my pet name, which I can't repeat here but it's always fun to say.

Video stores are endangered I think
 

I used to work in a video store last year and had to quit because the chain was an iron fisted tyrant. I learned alot about how video stores operate and I think the entire movie rental store chains are endangered. Alot of the problems were already mentioned in this thread. Netflix is a great idea but I don't even know if they will stick either. The future of movies IMO is definitely in satellite signals directly to your TV. Imagine that there was a database of nearly every movie and I could use my computer to order one, and it would be sent to my TV via satellite instantly? There is already a company offerring something similar, where you pay a monthly fee and rent a box (I think 5 dollars) and it stores about a hundred movies, mostly new to video releases, and then I think they are only a dollar or two to rent. The movies are updated every month. Now that doesn't sound too fantastic, but once it can store a thousand movies, or almost all movies, or I can pick exactly what movie I want in my box, then that is where movies are going. The theatre has its own magic which I think people will always want, it is an experience. But home video is different, and videostores up against things like Netflix and satellites I don't think will last much longer than 10 more years. I guess we'll see

mine's 4 bux and with tax it's roughly $5. that's why i never goto it.

boyd re: FP vs direct-view. imho, you can get a small portable projector and ceiling mount it and put it on a small screen (80") if you want to to "simulate" plasma. but point is with a FP you can go FROM 80" to 250" if you wanted to.... any flat panel will be limited by size that they came in. and for the money... it doesnt make sense imho =).

greg, i never miss a payment date cause i can schedule minimum payment deducted from my checking account every month it's due. it's automated. then, when i get enough money i pay the whole thing. all truly paper-less. truly one less thing to worry about =).

re: VOD. as i've said before, i'd do it if there is a pipeline (be it satellite, cable or fiber) that can deliver @least 1920x1080p if not more with MLP (uncompressed) capabilities. essentially i want them to stream HD-DVD or BluRay quality. cause if they can't do that i'd rather NOT watch important films that way. i can't imagine watching lord of the rings through compressed mp4 or stereo when i know HD-DVD with 6.1 MLP (theoretical) is availble. but i also know that i'm a minority. the same audience that loves mp3 (which is a huge mass) will love anything convenient. i do believe the future of TV/film lies in VOD/subscription based. you can watch things you want at the time/convenience of YOUR life instead of tivo or waiting for the time of the show to come on.

BrightHouse cable down here in Florida, which used to be Time Warner cable, offers what they call iControl. It's available in regular as well as HD, where you can pick and choose from various shows and movies that have been showing that month or two months. If you have all the pay channels, they throw in the iControl as a free service - so essentially at any given time you do have a 100 or so films (and even more other cable shows) readily available. You can pause, fast forward, rewind, etc.

<<<-- Originally posted by Yi Fong Yu :.

greg, i never miss a payment date cause i can schedule minimum payment deducted from my checking account every month it's due. it's automated. then, when i get enough money i pay the whole thing. all truly paper-less. truly one less thing to worry about =).
. -->>>

Yi, you are exactly the type of person this company is looking to trip up. What they are doing is altering the due date each month. For example, you see the payment is due on the 18th and you schedule it as such. So next month rolls around and they bump it to say, the 12th. Unless you go in again and verify the due date and alter your payment scheduling accordingly, you'll get dinged. For many years, cc payments like loan payments, have been due on the same day each month and they know this. They know that we are creatures of habit so most won't be diligent enough to catch the change of due date. Fortunately, none of the other cc companies I have are using this tactic.

It never ceases to amaze me what some companies will do to milk a few extra dollars out of people.

-gb-

but Greg,

i have to check the cc statements online ANYWAY for every payment that is scheduled (such as mortgages, auto insurance, utilies, etc.). so since it's automated if there is a duplicated charge i'll know it immediately and besides it's automated on their end as well. unless someone decides to actively deceive the system there is no problem. i've NEVER had to worry about due dates ever since i started using auto-deduction. i don't get what the fuss is about. they can change the date from the 1 to 31 to 15 to 20 every single month for all i care, as long as i'm charged duplicate then i'm OKAY!

Here's an interesting twist on this whole story.

Lion's Gate, Microsoft, and Blockbuster have started a company called CinemaNow. A site where you can rent & buy downloadable movies direct to your PC.

Ok I checked that website out and the selection is probably the most awful thing I have ever seen. HOWEVER, that is exactly what I was talking about. Folks, we have just seen the future. It is Cinemanow and whatever else spawns from it. (I think)

Hollywood Entertainment's board voted yesterday to advise shareholders to reject Blockbuster's hostile takeover bid in favor of a lower offer from Movie Gallery:

http://www.fool.com/News/mft/2005/mf...gvisit=y&npu=y
http://www.forbes.com/associatedpres...ap1835885.html

Haha! That's like a slap in the face.

<<<-- Originally posted by Jacob Ehrichs : It's not a scam, just a business practice. You agree to the terms or you don't. They're not hiding anything from anyone. If you keep the movie longer than a week overdue they charge you for the movie. Seems pretty straight forward to me. Just because it's a business practice you don't like doesn't make it a scam. -->>>

It is a scam.

Argh Blockbuster.

I'm not a pain in the ass. I'm not the type of person that makes a stink in a public place. I'm 27 and this was the first time in my entire life I've actually gotten angry or 'caused a scene' in a situation like this. It'll probably be the last time as well.

I was told I had to buy a copy of Ron Burgundy (look! it's PBS! - great movie) last week for turning it in late (had it for about 3 weeks). I never received any mailing that stated that the terms of my blockbuster contract had changed. I was told that I can keep the DVD for "a few extras days" if I wanted; I was never told anything about a 1 week extended deadline*. I was also told that Blockbuster was done with late fees. None of the various Blockbuster posters advertising the new No Late Fees mention annything about purchasing after a week, even in the fine print.

It's thickly veiled bait and switch. They tell you just enough to think you're getting this great gift, but they never mention that there's a new fee structure. They just talk about the 'advantage' to the costumer w/o mention or warning how to avoid repurcussions (again, never mentioned), and then they persue after the fact saying - but oh, it's our policy.

We (fianc & I) closed our Blockbuster accounts and opened Netflix the same evening.



*I just read the article about a $1.25 restocking fee, 30 day buying it fee. The employees told me that it was one extra week. Just the fact that there are all of these misdirections and miscommunications is what is making Blockbuster look so bad about this whole thing.

Any time anyone tells me its free. I always look at it that I'm going to be hit with a bill.

It's just another way to get more money out of us.

I used to hate walking in the malls and having all these high school punks yell at you "hey you want a free phone."

So one day being the smart ass that I am. I walked over to the kid and said "Okay. Can I see the phone." He handled it to me and I said "thanks" and started to walk away.

He said "hey were are you going?"

I said. "I'm just leaving with my free phone."

He didn't think it was funny. But a couple of people around me did.

<<<-- Originally posted by Imran Zaidi : Haha! That's like a slap in the face. -->>>

Question is: who's getting slapped?

Well, FWIW; I recall reading (VERY recently) about litigation initiated by the NJ Att Gen against BB for EXACTLY THIS. Something about violation of their Consumer Fraud Act.....deceptive promotion, etc. Has a Class Action Suit going, IIRC. May have been already covered here, or not; just a point to ponder.........oh, yeah - on today's MSN Money site, with comment on market perceptions, IIRC.

Even though I don't really agree this relates to this thread...

http://money.cnn.com/2005/02/18/news...ex.htm?cnn=yes


In my experience I was told up front by Blockbuster employees the first time I rented under the No Late Fees program how exactly it worked.

it's funny because some lawmakers also love watching movies. so they rent@blockbusters and probably experienced the same things consumers do =).

I want to watch my movies on a Barco or Christie projector like Boyd uses at the Philly Opeera! :-)

Seriously, I used to find it such a pain in the arse to schlep back down to BB (their nearest store is not on my way to anything) with my returns in order to avoid becoming part of their "revenue enhancement" scheme (late fees). So when Netflix hit the scene, I was elated./..of couse now its an industry paradigm that evrybody including BB is emulating. Of course, the competitive pressure from the imitators helped force Netflix into lowering their price...gotta love that. But you can't beat the ease of throwing the dvd back into the postage-free mailer and sticking it in the mailbox outside your door.

What makes it work for me is that they have just about everything...from new releases (you can put a movie on your list before it even hits the theater screens, it just waits to go in your queue until the movie is released on dvd) to old John Wayne and Kurosawa to Ken Burns docs and vintage rockumentaries to TV shows. I love the last one, I can see all the Sopranos and Sex & The City episodes without having HBO, and watch 3 episodes in one sitting if I feel like it. And catch up on Buffy. Try getting that kind of comprehensive inventory with your local B-Buster store.

As far as jonesing out for a certain special movie I GOTTA see tonight, what are the chances that it will be in stock at even the best rental store?

And yes, BB's hidden late fee IS a scam as far as I am concerned...like the baks that advertise a low fixed rate on their cards until the first time you are one day late and they jump your interest rate to 21%...Better yet, how about the banks that have rates that they can change if you are late with OTHER creditors!!!!! (they pull a credit report at various intervals to see how you are doing with all your loans and charge accounts!) It's all legal if it's buried in the contract...the large print giveth and the fine print taketh away. By contrast, if I want to I can jolly well sit on a movie for half a year or longer with Netflix and the only thing that happens is I don't get the next movie in my queue until I return one. I recently held on to Gangs of New York for three weeks before getting around to watching it...it's a pretty long movie. Bottom line, read carefully. I prefer and recommend Netflix, but of course your mileage may vary.

It's funny, I was listening to a call-in radio show on a New Jersey station (NJ 101.5) this past Monday, and they spent a whole hour talking about NJ Attorney General Peter Harvey's action against Blockbuster. The hosts of the show (who are very sarcastic) were pretty much ripping the state of NJ for the whole thing. One wise-assed caller theorized that the state was taking action because they didn't like the precedent of anybody eliminating fees. The hosts claimed there was only one consumer complaint to the attorney general's office. They also pointed out that after 8 days Blockbuster is supposed to call you and send out a notice that your rental is due. Most of the callers seemed to agree that the action by the state is frivolous and that their local stores explained the new policy.

One woman called in and was upset because her son had rented a video game which he hadn't returned. She was hit with a $40 replacement charge after a month and said she didn't get any notice that it was due. One might wonder why she let her son use her card without monitoring it though...

Before Blockbuster started this policy my daughter would receive cards from them about overdue rentals, and she racked up some pretty big bills for late charges which she ultimately had to pay (I'm glad the card was in her name and not mine! ;-) I think their new policy would have saved her quite a bit, assuming they sent out timely notices. Evidently the late fee is only $1.50 for up to a month.

<<<-- Originally posted by Mike Butler : I want to watch my movies on a Barco or Christie projector like Boyd uses at the Philly Opeera! :-) -->>>

This is off-topic, but interesting that you mention it... Barco is bringing me and several other designers to Scottsdale next month for a meeting to launch their new "creative light imaging" division. They are going to show off their toys and get input from us to help them plan new products and solutions for the performing arts. Should be a lot of fun; I'll report back to everyone afterwards. Of course, none of us will be able to afford most of the cool stuff they show us... ;-)

As for watching DVD's... I just got a 37" plasma screen which looks pretty good to me as I relax on my porch with my beverage of choice :-)

Speaking of which - I just got a call from blockbuster tonight about my rental of Se7en.

I'm gonna watch it one more time though....

That 37 sounds like just the thing to beat the pants off my 36" Mits (8-y.o. CRT) which is 2 feet deep and too mammoth to put out on the porch. Actually I spend most of my viewing time in the kitchen with a 27" Samsung (also a CRT)...the only flat TV I have is a 23" Sony LCD. I don't like the picture on it and really only use it for field setups, when its 2.5" depth and light weight make it a breeze to schlep in the car or truck.

Hostile takeover is off
 

In case anybody is still following Blockbuster's exploits, today they withdrew their hostile takeover bid for Hollywood Entertainment, citing concerns that it wouldn't make it past regulatory approval. This gives a green light for Movie Gallery to acquire Hollywood Entertainment, creating a combination of the country's #2 and #3 video rental chains.

http://biz.yahoo.com/rb/050325/retai...kbuster_3.html