Wednesday, February 16, 2011

Blockbuster needs a new business model (obviously)

Today, I curiously clicked on the "On Demand" button within my online Blockbuster account. This curiosity was created because of my use of "Watch Instantly" on Netflix. I'm still getting my money's worth out of my free trial. I've mentioned previously about why I can't justify Netflix—lack of recent movies for instant play. But, my free trial has made me look into what Blockbuster can offer me in comparison for online movie play.

After viewing the FAQs of On Demand at (here), I understand why more people are choosing Netflix. The first two sentences in FAQ #2's answer sums up that reason perfectly:
"No. Blockbuster On Demand is separate from a Blockbuster By Mail subscription plan."
What...the...fu...?! Seriously!?

Once again, this is how BB appreciates and rewards is customers, old and new. How long have customers felt like BB has screwed them over the years with exorbitant rental and late fees? How did BB respond: they took late fees away and then sort of brought them back as well. Now customers want to be able to view movies online. What did BB do: to please customers and to compete with Netflix they added On Demand...but with a catch. Unlike Netflix, the online viewing at BB will require a per movie rate versus a monthly rate. Wrong move BB!

Without getting into the nitty gritty and regurgitating facts I'm sure many others already know (because I'm new to Netflix and online movie streaming), Blockbuster has failed once again to capture, retain or gather customers. Why would ANYONE want to pay extra for something that a competitor already include in its packages? Other than the brick-and-mortar store exchanges, BB has no differentiator...and this differentiator obviously isn't enough to compete.

Anyway...just for shits and giggles, let's compare a plan of each.

  • Unlimited streaming only @ $7.99
  • Unlimited streaming and 3 DVDs @$19.99.
  • Unlimited streaming not available in any plan
  • 3 DVDs/Games @ $19.99 (5 in-store exchanges per month)

No comments: