Blockbuster Store Dropoff?

Two sources have reported that Blockbuster is possibly adding a cool feature: store drop-off of Blockbuster Online movies:

I am a Blockbuster manager and we just had a meeting about the new Blockbuster Online features, launching this month.

Among the new changes include: The ability to return online rentals to the store. While it seems pointless to drive to a store to have us mail the DVDs, this does clear your queue immediately versus the 1-3 days ship time and allows your next DVD to be shipped immediately.

In addition, for every single Blockbuster Online DVD you return to the store, you can get any movie rental off the shelf for free -- new releases, Favorites, doesn't matter. Your Blockbuster Online envelope will double as a coupon for a free rental. This all starts next week.

I'm going to try to verify this story today.

Thanks to John for reporting this.

Comments

[gir]

" for every single Blockbuster Online DVD you return to the store, you can get any movie rental off the shelf for free"

Hmmm. Brilliant? Or insane?

[usermonster]

"Hmmm. Brilliant? Or insane?"

LOL. That's what I'm wondering. My BB store is just down the block, right next to the mailbox where I drop off the envelopes. Seems too good to be true. Of course, I was just in there the other day to use my weekly coupon, but I have to say, I left empty-handed. The in-store selection is awful.

[Becky]

I received a survey from Blockbuster Online in which they repeatedly asked me my opinion on the new drop-off feature.

[danb]

Here's more info, for those who missed it:

http://www.hackingnetflix.com/2006/08/blockbuster_onl.html

[Edward R Murrow]

So this means that Netflix has 40+ shipping hubs and Blockbuster has 5,000+ shipping hubs. Nice...

[Edward R Murrow]

PS, I'm thinking this makes it a solid play to go short on Netflix prior to their announcement of financial results in about 1 week.

[type-cast]

"So this means that Netflix has 40+ shipping hubs and Blockbuster has 5,000+ shipping hubs. Nice..."

That may be, but it's a bit like having 500 channels with nothing on. The store selection has been awful recently. I tried to rent The Mack for weeks, but it was always out. Either someone bought their two copies or stole 'em. I finally just rented it online. Even 30 year old films like Network are never in stock.

[Howard]

Mike, I emailed you a bit about this earlier, but was at a BB store tonight and asked one of the guys once the manager stepped away from the front. He said it starts next week or the week after, he couldn't remember.

[vio]

I looked into it. Apparently it's officially being called "Blockbuster Online Total Access." One big catcher is that BBO customers will no longer get a free in-store rental coupon every week. They will now only receive 1 per month. However, they can bring in all 3 of their BBO rentals and trade them for 3 in-store rentals, so it's actually a much better deal. A little TOO good considering what they're paying for this.

I fear what this is going to do to copy-depth in the stores though. They can barely keep movies on the shelf as it is with the Movie Pass and no late fees policy.

[noe638]

I always thought the key to BB success was using the stores as distribution centers...it doesn't make sense to use the post office for two separate transactions (store mailing back to dc and dc mailing to next customer). It must have something to do with the franchising.

After my instore sign up experience (after signing up for bb online), I was pretty confident that BB would not be able to successfully integrate BB online and the stores.

[type-cast]

They're probably counting on most people not taking advantage of the store rentals. If I recall, they said only 40% use the weekly or monthly coupons. Whether the deal is good or not depends on what you want to rent. I have trouble finding anything in stores now. You see whole shelves that are empty. Converting late movies to sales also hurts their store selection. They shouldn't let you buy rental movies. End of Late Fees and Movie Pass are slowly ruining in-store selection.

[Howard]

33 out of the 36 titles in my queue are not carried in store. I wonder how this will affect BBO's already poor title availability and inventory management. Will stores only ship to people in state or follow BBO's imaginary three day shipping zones?

I don't see a BBO movie a person returns going from BB store to a DC. The store will most likely send directly to the next person waiting for the title.

[Edward R Murrow]

Just a matter of time before Blockbuster has in store, very fast download and burn on demand for customers. Disc storage is cheap so maybe each store has a server with a disc farm that stores New Releases that can be burned in a matter of minutes on customer demand. I still like the 5,000+ versus 40+ shipping hub ratio in Blockbusters favor.

[Handtek2k]

I'm a netflix guy because I don't like going to the freaking store. It would irritate me to have going to the store be so strongly incentivized in a service offering thats supposed to come to me.

[superfunhappy]

-- "Just a matter of time before Blockbuster has in store, very fast download and burn on demand for customers."

And you're getting this info where?

-- "I'm thinking this makes it a solid play to go short on Netflix prior to their announcement of financial results in about 1 week."

Not for nothing, but you are oddly over-rosy in your predictions about a company (Blockbuster) that, so far, seems to have had serious problems executing anything on-task. It'd be great if they can turn it around but I haven't seen anything that indicates that happening yet.

The return to store concept seems good and bad for various reasons. We'll just have to see.

[usermonster]

The blockbuster in store rental experience has always been a strange one. It took ten years before I joined the store in my neighborhood -- when I first tried, the incompetence of the staff drove me out of the doors. I gladly walked three more blocks to the local indy rental place, and was happy there for years. I joined the store when signed up for BBO. The store is huge, the aisles wide, and the shelves dispiritingly bare. The place is run by three or four hapless employees, who always seem to be in the middle of trying to solve some insurmountable customer issue. It takes many minutes to check out with a DVD, whereas at that tiny indy place -- I mean, really tiny -- with the superior selection, the two workers check people out like clockwork. The huge rent (I live in NYC) for that enormous, empty store that BB or the franchisee must pay - I can't imagine how it's profitable.

[John]

Not all stores are distribution points, but many areas have at least one store that is. Most of these stores ship favorites films (more than a year old). I think it typically falls upon the stores with a smaller in-store customer base, as my store (less than 2000 active members) is a distribution point, as is the nearest store in the same town (within 2 miles of our store), yet the next closest store, a much higher volume store, is not an online distribution store, or an Online Fulfillment Store, as they are called.

I know some people don't like the fact that to receive the full benefits of this, you have to go to the store. But let's compare two scenarios. With Blockbuster, if you have a movie in your queue that has not arrived yet, you could simply call your local store and ask if they have it in stock. Then all you'd do is simply trade in one of your online rentals, which would have been lower in your queue, to get the title that you REALLY wanted at that moment. With other rental companies you are sort of stuck with what you have unless you want to shell out another four dollars to try to get that movie, or wait a few more days to see if Netflix/etc. sends it. At the very least, it provides a viable alternative that is ALWAYS there. A majority of Americans are within a reasonable distance of a Blockbuster store, so it is something that many, many people can take advantage of relatively easily.

And some may be asking how we're making money off this... well, not to give too much away, but stores get rewarded when customers redeem their free online rentals in-store and Blockbuster also sells an insane amount of previously viewed DVDs and games (we just had a massive 3/$20 and 4/$20), as well as confection, magazines, etc. and cater to a large amount of members not enrolled in any premium service (Rewards, Movie Pass, Online). Our store has the largest Rewards customer percentage in our district but 65% still are not on the program.

We had been giving out free month trials of Blockbuster Online to every customer, while it had its previous terms. With the new program, obviously with a higher volume of movies available, there are now 2-week trials.

[Rusty Ramrod]

So let me think about this, volume wise.

I’m too lazy to add it up again, but I believe the theoretical maximum number of rents I figured long ago for NF or BB is around 39 a month on the 3 out plan. With throttling engaged, most of us seem to get 12 -15 titles a month.

Let’s look at this new model from a volume standpoint.

3 movies arrive via postal mail on Monday morning. Watched and returned to the BB store on Monday night. According to what I read above, they would accept the movies as returned and give you 3 more local rents at no charge. In addition, BB Online would acknowledge the movies were returned that day and ship you 3 new ones on the following day. I am in a one day USPS ship zone, but not counting the first 3 they send when signing up for a new account, most all of the other movies take a minimum of 2 days to get here since they sit on them a day after they claim they ship them.

Even taking that outbound throttling into account, that would allow for 78 movies to be rented in November. If they still offer the coupons, then 82 or 24 cents each rental.

If they drop in another day of throttling (3 day delivery), then 54 rentals, 58 with coupons or 33 cents a rental. Even that beats the hell out of 16 with coupons.

Obviously this is not going to happen, so how will BB throttle after the program is in place? Delaying the outgoing shipments even more?

I feel, for the power renter, this could be an excellent program. The biggest issue I see is it would be easy to quickly exhaust any and all decent rental titles from the local store. In my case that might actually be a good thing. I am a fairly mainstream renter and thus, I’m sure there are a lot of good films sitting on the shelf I have never considered.

[BoB]

This is just ANOTHER feature that my local area franchised stores won't participate in.

We still have late fees, no store shipping, etc. The only thing they do is honor the coupons but their in-store selection is so poor I haven't been there in months.

[Bulldozza]

Blockbuster=Buggy Whips

You could write a book (and someone probably will) about all the mistakes Blockbuster has made. From the CEO calling Online Rentals a niche product to the "No Late Fees" debacle to consistently poor customer service. the slow decline of video stores is well under way and is speeding up. stores are closing almost daily industry-wide. Too bad..so sad..but it's time to put a bullet in Old Yeller.

[peter]

Comes too to keep this customer...I dropped them this month..they closed the store in my town, so I would have to drive 30 min. to use the 4 p/m coupons or to use this new drop off feature.

I think they're a doomed company.

[peter]

opps...I was late in placing "late" betwixt the toos.

[type-cast]

"From the CEO calling Online Rentals a niche product..."

I think it was Movie Gallery's CEO that said this. No Late Fees IS a debacle. The shelves are barren. People keep discs for weeks. The rental discs are sold and not replaced. More people are using coupons. The stores are not bringing in money. They should copy Red Box. Say there are No Late Fees, but rentals cost 50-99 cents a day up to full retail price.

[vio]

"No Late Fees IS a debacle. The shelves are barren. People keep discs for weeks. The rental discs are sold and not replaced. More people are using coupons. The stores are not bringing in money. They should copy Red Box. Say there are No Late Fees, but rentals cost 50-99 cents a day up to full retail price."

They need to make some major changes if they want this "Total Access" thing to be a success and give them the leg up over Netflix. They should reinstate late fees. Something like 3-day-rentals on popular new releases and a $.75-1.00 fee for every day late. Naturally, this will greatly upset their Joe Sixpack customers who think they need 2 weeks to watch a 90 minute movie, but there's a difference between making your customers happy and flatout bankrupting yourself to make your customers happy.

They've also gotta do something about that Movie Pass thing. They should seriously consider getting rid of it altogether or jacking up the price on it to drive people OFF of it.

Seriously, does anyone really need to be bothering with that $30 a month Movie Pass crap when you can now trade in your BBO for free in-store rentals?

[dipnfalls]

Ok this will work for some people and for some it wont even be a option.

I live about 2 mins away from my local blockbuster. I have the Movie Pass for $24.95 a month and rent 2 movies EVERYDAY for the past year or so. I have a list of movies that they carry in the store which I work off of. If something isnt available I move to the next movie on the list. I check my list with my store online on blockbuster.com whenever something new comes out I wanna see, if the store carries it, it gets added to the list. If not....

I use my Netflix account which I have 8 out at time for all the TV shows and whatnot I rent that the local blockbuster no longer carries. Anything they dont have get put in my queue that costs me what $50 a month to have....

So all in all I spend $75 dollars to watch these movies. The only reason I rent everyday is because if I pay $24.95 a month and drive by the blockbuster everyday to goto work why not use it to its max and get something everyday....I pay to rent as many as I can a month anyway I still have about a hundred movies and tv shows on that list...

Now Blockbuster.com comes out with this new thing, which after hearing about from one of the brain dead nighttime part timers lastnight, I confirmed with with my local store manager this morning that they will be starting this nationwide on Oct. 24th and the DM was also in the store and also talked to me about this...

So I came up and changed my Netflix from 8 at a time to 4 at a time, signed up for a Blockbuster.com 4 at a time plan...and tomorrow I will cancel my Movie Pass....Now I will be able to still get all the movies online that they dont have in the store while now also getting the instore rentals that I have on my list for FREE, just for stopping in a dropping off my returns. No Problem, before I would drive by the post office to drop of Netflix and then Blockbuster to get my movies....But if this all works out, even with some delays I will cancel the Netflix and up the Blockbuster.com account. Still managing to save myself $25 bucks a month.

Only reason I never liked Blockbuster.com was they had 2 day shipping each way where as in my area Netflix had 1 day, but ever since I beccame a 8 at a time "power user" with 2 queues, I have begun to get throttled all the time in the past month or so. Movies shipping the next day instead of that day they get one back or having to ship movies out of different Distribution Centers all of sudden when for over a year that has never happened but has happened 4 times in a last few weeks and taken that movie shipped from across the country a week to get there....

People like us, Netflix loses money on. They want us to stop renting from them. So why not give this new thing from Blockbuster a shot, I still get just as many movies and save $25 bucks a month....