Blockbuster Launches Total Access Program

Blockbuster officially launched the Total Access program yesterday (press release), which enables customers to return movies to the store where they can be exchanged for a rental, potentially doubling the number of movies per month. When the Blockbuster Online movie is returned to the store, it will be removed from your queue, and the next title will be shipped, saving the time it would normally take to return the movie by mail.

Blockbuster has reduced the number of online coupons to one per month, and they can only be used for movies unless you signed up during a special promotion.

Movies you rent in-store will not be removed from your queue, so you will need to manually remove the title from your queue to avoid duplicate rentals. Your in-store rentals are subject to local terms and conditions, including late fees or purchase, depending on location (my local store charges late fees).

Tidbits: Blockbuster is now offering 60,000 DVDs (Netflix has 65,000 titles), and has 1.5 million subscribers.

Dusty already received a new Blockbuster Online envelope for the program:

Details of the new program are available in the Blockbuster Online Total Access FAQ.

Would you consider switching from Netflix to Blockbuster because of the Total Access program?

Thanks to Alex, MLM, Eric, Robert, and "The Blockbuster Project" for sending this in.

Comments

[gir]

I'd consider it, but there isn't a blockbuster near me. Even if there were, I don't think I'd switch. I don't like going to the store, and I already get as many movies as I can comfortably watch (though I am on the 5-out plan).

[superfunhappy]

Interesting investor perspective although to be fair, the guy who wrote it is almost always overly Netflix-friendly.

http://www.fool.com/news/commentary/2006/commentary06110109.htm?source=eptyholnk303100&logvisit=y&npu=y

[junkfood]

I'm seriously considering it. I almost never rent DVDs and I don't even have a Blockbuster card. However, several times a year I have a friend over or something and we'd like to get a DVD. Often times whatever Netflix DVDs I have around the house aren't what we're looking for. At that point, I wish I had a Blockbuster card because it's so close to my house.

If I could just pick up one of the Netflix DVDs, take it to the local video store and exchange it for something we want to watch right now I think it's a no-brainer.

I love supporting the little guys like Netflix over the big corporate guys like Blockbuster, but I must admit this is really tempting.

This is exactly the sort of reason that Netflix needs to develop a downloading solution to counter. Netflix + TiVo sounded like a dream come true, but I guess they couldn't get past the copyright lawyers.

[moviejunkie]

Sweet! I was in a BB store last night and it was almost TOO easy and TOO good to be true. I'm gonna keep my Netflix account for November just to make sure this all works and then toss it. And there is a BB store in proximity to almost everyone! I understand if ya don't wanna get out and go there, but the're all over the place. I haven't figured out how BB is gonna make money on this, but I bet they're gonna get some people to follow and switch over to this total access.

[usermonster]

"I love supporting the little guys like Netflix over the big corporate guys like Blockbuster"

Netflix is not a little guy.

[trixare4kids]

I live in an urban area where parking really sucks so I know this isn't an incentive for me. One blockbuster has only metered parking in front and the other has a 5 space parking area. No thanks.

Also, I don't know about the rest of the country, but the customer service in stores around here (Oakland/Berkeley, CA)sucks big time. There will be 8 clerks: 7 of them checking IN movies and 1 of them helping customers every-so-slowly check out. It takes 20 minutes in line every time.
Forgetaboutit!

[popcorn]

This looks like a great deal for the consumer. However, there is no Blockbuster participating in the Middle Tennessee area. (they are all franchises) So I actually canceled my online account with them!!

[Twinone]

I like the fact that I have a choice of going to the store or sending via mail at no extra cost. This will satisfy my need for instant gratification, convenience and also a good selection of movies. THIS IS GREAT FOR THE CONSUMER.

--Since when does the little guy get traded on the NASDAQ?

[Flixster]

Depends on your perspective, I guess. Netflix, last I checked, had about a thousand employees. Blockbuster certainly has more than that. In terms of market capitalization, though, Netflix is larger.

My take is that this may have an impact on movie availability for the BB online service. This effectively means that some of their inventory is going to be stuck in transit between the stores and the hubs. In the meantime, the hubs have already shipped a replacement movie to the customer. That means that BB Online is going to need to stock more discs, which raises their costs.

I smell money burning.

[junkfood]

Sorry guys, I stick by my "little guys" statement. Netflix, like TiVo, may define the market but they are still the little guys. Ask 10 people on the street if they know what Netflix is and at least half will say no.

My point is that I'd rather support them because they need our support more than Blockbuster. If they go away (not that I'm saying they're close), Blockbuster would lose a big competitor that is helping to keep them honest.

As far as how Blockbuster is making money, they make the money when you walk in the door. You're more likely to pick up popcorn, candy, maybe even a used DVD. They want you in the store and are willing to give you the incentive of this service to get you there. Not to mention potential new customers like myself. Right now I don't even have a Blockbuster card. Signing me up for this service means I would need to sign up for a card in their store too. A double-win for them.

[Dusty T]

I personally think this is awesome. A BB store is only a ten min. walk away from me. I've been using this service since Saturday and have found that for some reason when they scan the movie it doesn't automatically get removed. It took a day to get removed. When it did get removed they shipped me five discs instead of just my three that I pay for. I assume this was a computing error, but I love an error in my favor.

I was with Netflix last year, but made the move to BBO when I heard about the e-coupons. Now with this service. I personally see no reason to ever go back with netflix. However, BB online site does stink to high heaven. They really need to work on that aspect.

I was also wondering. Does anyone still get the e-coupons for renting games? I know you would have had to sign up a long time ago to still get them, but I was just wondering if anyone still actually uses them.

[BoB]

"Does anyone still get the e-coupons for renting games? I know you would have had to sign up a long time ago to still get them"

I used to get them but they dropped them from my coupons last summer (2005). When I complained they said, "sorry" we're not doing that anymore." Yet plenty of others said they still got them. I contacted BBO again and they would not do anything about it. BUT according to their FAQ posted above, if you get them, you will continue to get. Doesn't help me as they dropped mine with no reason and no excuse - so I dropped them!

I did do a store search and it shows my franchised stores as "total access stores" so I guess they are participating. I don't know if I'll try them out again as they still suck in my book. I had a great experience with them for almost a year but they went downhill starting last May 2005. Games were dropped from coupons, lost discs with no replacement right away, nothing shipped for 10 days even though I had 26 "available nows" in my queue. CS finally admitted none were at my local center and that's why nothing had shipped. ?!#@$# When I complained about that - nothing!

[Scribe1964]

Nothing about this program appeals to me. First, I tried BB's online trial a couple of years back and it was a disaster. I never got any of the top five DVDs in my queue even though they were all supposedly available "now." One of the DVDs I received arrived broken. They sent me a replacement, which was also broken! In addition, the dvds took a day longer to get to me than Netlix.

The free in store rentals is cool, but all the stores near me have a terrible selection, especially the kind of films I like to see. I guess it would be great if I loved straight-to-video horror crap.

[Jme_N]

I've been a Netflix customer for about 2 years now, so after hearing about this new "TOTAL ACCESS" that Blockbuster offers, a couple of days ago, I headed up to my local store about a mile away. After talking to one of the instore employees, I was really interested in what Blockbuster is offering. Not only will I get my online movies faster because of the instore check in, It will be a quick fix to any damaged discs, and I get store rentals for free anytime I return my movies to the store. I signed up 2 days ago using a PROMO CODE 91006B (as in BOY) and I recieved my movies this morning. watched one of them and returned it to the store, and got a free rental. Although Im going CANCEL NEXFLIX once I test Blockbuster and this TOTAL ACCESS. It seems like I have the best of 2 worlds now.

[Stomper]

Bye bye netflix, hello block buster. I just cancelled my netflix account (I opened my block buster account a week ago). After three weeks of the worst throttling I have ever had from netflix, its time to part ways.

My daughter (3.5 years old) loves to pick out her own movies. So now I dont have to clutter my queue with her movies. When we go to return the watched movies, I can let her pick them off the shelf, which she seems to enjoy much much more.

[usermonster]

"Ask 10 people on the street if they know what Netflix is and at least half will say no.

My point is that I'd rather support them because they need our support more than Blockbuster. If they go away (not that I'm saying they're close), Blockbuster would lose a big competitor that is helping to keep them honest."

Please. Netflix has over 5 million customers, while BBO about 1.5. Netflix doesn't only define the market, it leads it. I would say that the opposite is true: BBO needs to survive to keep Netflix honest. Don't get emotional about a company; they don't about you.

[priv8pete]

I just checked to see where the closest Blockbuster was to my house - 26.97 miles away! Yikes. So, Netflix will keep my business, but if I was still back in Jersey I might be swayed since there was a Blockbuster 2 minutes down the road.

[Dorttocs]

I will be be giving Total Access a month to make sure everything is going to work as well as they say. If it does work well, I will be cancelling my NF account.

I still get the game coupons and use them every month. If you switch to any other plan, you lose them forever.

I wonder if they will be raising the price of the "Total Access" plan after a while....after they get a bunch of people to quit NF????

[Edward R Murrow]

"I love supporting the little guys like Netflix over the big corporate guys like Blockbuster"

I know 'usermonster' already responded, but it bears repeating. Netflix has 5.7 million customers, Blockbuster has 1.5 subscribers. Please think this through again; who is the underdog in the DVD online world?

Netflix acts like the monopoly it is:
1) the well documented throttling which cost them money in a court of law
2) when they send the wrong or damaged disc, they wait until they receive the disc back before issuing a replacement
3) shipping from across the country to use the USPS to indirectly throttle
4) 15+ minute wait times on phone calls to customer service
5) the customer service has been dreadful the last couple of months; if they win another customer service award, you know the fix must be in

Blockbuster Total Access is the better value proposition. The choice should be made on value, unless you have money that you just need to give to Netflix.

[junkfood]

I'll spare everyone the back-and-forth with one final response on this.

Blockbuster is clearly larger. 1.5 subscribers just accounts for the online portion. Think about how many customers they have in general.

I think everyone is missing my point. Netflix is the smaller, newer kid on the block. And they are forcing Blockbuster to respond to them. However, because they are smaller they need support. Do you think Blockbuster would even have an online service if not for Netflix?

As far as Netflix service problems, I only experienced throttling when I was turning around my DVDs within a day. Now that I have slowed down to keeping them for several days, the turnaround time from them is much faster. Still not as fast as when I was a new customer, but not bad.

If I give Blockbuster a try, I hope they will be at least as good. Too bad their site isn't nearly as good as Netflix's either.

[Stomper]

I think this change is big enough to merit a new website, www.hackingblockbuster.com (seems taken)! Maybe www.hackingbbo.com?

[rockiavelli]

I wanted to post the promo code I got at the store, since they told me you can't get a free two week trial without it. It was 31066B. The URL on the card, which is huge, (why are they so big?) was just www.blockbuster.com/total

I signed up last night. We'll see, it has to get me more movies that Netflix.

[Edward R Murrow]

"Interesting investor perspective although to be fair, the guy who wrote it is almost always overly Netflix-friendly."

I noticed that about Rick Aristotle Munarriz too when it comes to his takes on Netflix. Rick is *FAR* from fair and balanced about Netflix vs. Blockbuster. Not sure why that is, but knowing that about Rick you can take whatever he writes with a grain of salt.

[Edward R Murrow]

"I think everyone is missing my point. Netflix is the smaller, newer kid on the block"

Metrics:
========
BB market cap: 827.87M
NFLX market cap: 1.84B
BB share price: $4.33
NFLX share price: $27.02
BB earnings per share: -2.224
NFLX earnings per share: 1.06
BB Avg Vol (3m): 1,340,750
NFLX Avg Vol (3m): 1,392,630
BB online customers: 1.5million
NFLX online customers: 5.7million
BB 1y Target Est share price: $5.24
NFLX 1y Target Est share price: $28.50
BB % of Stock Held by Insiders: 2.78%
NFLX % of Stock Held by Insiders: 15.32%

So by which metric is Netflix 'the little guy'?

By the way, that last metric of NFLX % of stock held by insiders at 15.32% should cause the serious investor to run away screaming from this security.

[Da Greek]

I think there is a more interesting angle to the "Total Access" program than meets the eye. Check out: www.patentmashup.com
Based on years of advising companies on how to evade patent claims I can say this does not happen by coincidence.

[Da Greek]

I think there is a more interesting angle to the "Total Access" program than meets the eye. Check out: www.patentmashup.com
Based on years of doing this I can say this does not happen by coincidence.

[Mike_K]

Netflix is the little guy by far, at its peak 2000, Blockbuster had 40 million customers. Now it has more than 30 million.

Trailing revenues at BBI is 5,68 billion and it has 40000 employess.

When Netflix has about 1 billion in revenue this year and about 1500 employees you are out of luck trying to paint Blockbuster nothing more than a fat limping giant and Netflix the little guy.

Of course both are corporations so there is no argument, but the fact is that:

Netflix made Blockbuster to
1. Drop late fees
2. Start an online operation and free coupons and now "total access".

Throttle people should ponder whether they would be choking on late fees in stores if Netflix did not come along and innovate

[junkfood]

Thanks Mike K for pointing out what I keep saying about number of customers total, not just online. Not sure why people want to fight about whether Netflix is the little guy or not. Assumed most people here would be pro Netflix.

[YKdvd]

> "I think this change is big enough to merit a new website, www.hackingblockbuster.com (seems taken)!"

The domain is registered to some funny-named guy named Michael Kaltschnee... :)

[aussieguy]

OK I tried out the Total Access service and so far I am more than impressed. I was at the door at 10am yesterday with my 4 year old son. We were the first customers at the store to drop off our online movies instore.

I had 3 online movies to return so my son and I picked out 3 movies. Like a previous poster said kids love to pick out there own movies so my son was loving this. Much better than having to wait for the mail lady!

So we finally had our 3 online movies scanned in at 10.30ish and got our 3 free instore movies. Checked my BB online account at 2pm and the next 3 movies had shipped! I am expecting them from the mail lady today in 30 mins or so.

I also noticed alot more copies of new releases at the store as well. I was looking for MI3 and normally they would have 40 or so copies (I live in hicksville so the store is very small scale!). They had over 100 copies of MI3 however and plenty of copies left.

Well if BB can run this slick operation for a profit I am a customer for life. Now to see if it can continue to run smoothly aftera few more months!

[junkfood]

Thanks assuieguy. I think I'm going to stop by Blockbuster on my way home and sign up for a card, and then sign up for an online account when I get home.

I'll probably keep my Netflix account too for a month or so just to make sure that I like BB.

[XVarX]

I've been a Blockbuster Online subscriber for almost two years now, so the Total Access program won't really affect me much. I don't know if those mailers' postage are pre-paid, regardless of whether they are used to ship both ways, or only go one way.

Ideally, perhaps it could cut costs, if rather than paying to have all those DVDS shipped back individually, they can ship them from each store in boxes, at a better rate.

If nothing else, it does sound like a very good marketing tool: More incentives to attract more customers. Additionally, it makes the way their business operates vary from Netflix, as well as potentially bringing in some online customers into the stores more often. Plus, it incorporates their brick and mortar store employees as part of the labor to operate a vital part of the online service.

As for me, I get enough movies through Netflix and BB Online that I often have a tough time selecting a DVD with my Blockbuster in-store coupons.

Some months are easier than others, especially when a new season of Lost, NCIS, and 24 are released on DVD. But with all the free rentals, we'll see just what that does to the selection in stores.

[XVarX]

I noticed for this month, I still have my four, weekly, in-store coupons on my BB account. I wonder if the change to one coupon per month will be put into effect next month, or perhaps only applies to new subscribers.

[Tester]

I, like a few others here, will keep my Netflix account for a month or two "just in case". If everything seems to be working as it should with the Total Access program then I will close my Netflix account.

With Total Access I will wind up getting the same amount of rentals from just my Blockbuster account as I do now with both accounts but will be saving over $50.00 a month. It's a no-brainer.

[Snowyowl]

I was just about to put a BB Online movie in the mail this morning when I saw the TA email, so I took the movie to a nearby store and got a free rental [10am EST].

This afternoon, I got an email from BB saying that my next queued film had shipped [1:50pm EST]. This was because of the in-store return; I had no other business pending.

As before, the estimated arrival date is two days out, but they have been coming the next day. We'll see: I have three movies on hand... tomorrow, it should be four.

[type-cast]

[Netflix is the little guy by far,]

Only if you define Blockbuster by different criteria than Netflix. Netflix doesn't have any stores, so you must compare Blockbuster ONLINE to NETFLIX or it's a flawed analogy.

[Netflix made Blockbuster .... Drop late fees ... Start an online operation ... free coupons ... now "total access".]

You can't prove and don't know they did this solely or mainly because of Netflix. It's an unfalsifiable argument unless you can travel back in time and change history. That's like saying the telephone wouldn't have been made if not for Alexander Graham Bell. BBO has to face competition from other mediums even if Netflix goes away. Cable, satellite, pay per view, on-demand, downloads, even normal TV.

[Throttle people should ponder whether they would be choking on late fees in stores if Netflix did not come along and innovate.]

I return movies on time. I've never had late fees at Blockbuster. I have had some at the mom-and-pop stores that only give a few days to return things. You don't know what BB may or may not have done, because you can't test the premise. They had competition from other sources before Netflix. Maybe they would've got rid of late fees anyway. Who knows...

[vio]

"I love supporting the little guys like Netflix over the big corporate guys like Blockbuster, but I must admit this is really tempting."

Haha. Netflix is a 5.7 million subscriber corporate juggernaut who's aggressively trying to put all the video stores in the United States out of business and create a monopoly on the entire video rental business. Netflix is not David and Blockbuster Goliat; at least not anymore. Both companies are ruthless corporate giants, but if you take your business to Blockbuster, you at least increase the chances of brick & mortar stores staying in business.

[Mike_K]

Sure type-cast I can't prove scientifically that Blockbuster would not have done all the things it have done, and taken 70% haircut in it's stock price since 2000.

They probably did it because one day they woke up and though "hey we have really been taking too much profit from our customers. Let's cook up a lower-marging online business and spend 400 million to start it up so that our customers have more choice"

But let's agree that Netflix had nothing to do with their decisions if it makes your world tick.

[Mike_K]

"Nothing is real until it is proven mathematically correct. "

"Solution was elegant, reality was wrong"

NERDS

[BoB]

"I still get the game coupons and use them every month. If you switch to any other plan, you lose them forever."

Which is what CHAPS MY ASS so much. I didn't do anything other than use them. All of a sudden 1 month the "games" part disappeared from my coupon. I had not changed plans of anything. I was using the coupons to rent PS2 games. They dropped them with NO explanation other than they no longer did that. However PLENTY of people said they still get games; as you do now!?

Which makes BBO a big batch of liars! How can I support them when they just outright lie to me about the coupons? The 2nd straw that broken the camels back was when they did not ship any movie for 10 days even though I had 26 "available now". After a series of emails they admitted that they were not "available" from my local center so they would not ship them. Their "algorithm" was designed to ship from the closest center so until I put some "availables" in my queue from my local center, I would not get any. When I asked how could I know if they were at the local center, they replied I should have 30 to 50 in my queue. I though 26 was pretty close to 30.