Blockbuster says "no more late fees" (merged with other one)
12-14-04, 08:43 AM
#1
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Blockbuster says "no more late fees"
Associated Press
Blockbuster to Stop Charging Late Fees
12.14.2004, 07:18 AM
Blockbuster Inc., the world's largest video rental chain, said Tuesday that as of Jan. 1, 2005, the company won't charge late fees on any movie or game rental at its more than 4,500 company-operated and franchised stores in the United States.
Under the "no late fees" program, a customer has one week to return games and two days or one week for movies. Also, Blockbuster will give customers a one-week grace period at no additional charge. After that, Blockbuster will automatically sell them the product, minus the rental fee, or customers can return the product within 30 days for a restocking fee.
Blockbuster said it has been testing different rental options in U.S. markets, and in the "no late fees" markets the increased rental transactions and retail sales offset the lower level of revenue resulting from eliminating late fees. Additionally, the company will lower its ongoing marketing, operating and promotional costs.
Blockbuster said that including the continued investment in new initiatives and the expected continued softness in the rental industry, operating income for 2005 is expected to be flat with 2004, before about $50 million in marketing and implementation costs associated with the "no late fees" launch.
Blockbuster said late fees would have contributed about $250 million to $300 million to 2005 operating income, which is now expected to be offset by growth in revenue resulting from increased store traffic, less promotional and marketing activity, and increased cost controls.
So instead of late fees, you will be forced to buy the tardy little bugger.
Blockbuster to Stop Charging Late Fees
12.14.2004, 07:18 AM
Blockbuster Inc., the world's largest video rental chain, said Tuesday that as of Jan. 1, 2005, the company won't charge late fees on any movie or game rental at its more than 4,500 company-operated and franchised stores in the United States.
Under the "no late fees" program, a customer has one week to return games and two days or one week for movies. Also, Blockbuster will give customers a one-week grace period at no additional charge. After that, Blockbuster will automatically sell them the product, minus the rental fee, or customers can return the product within 30 days for a restocking fee.
Blockbuster said it has been testing different rental options in U.S. markets, and in the "no late fees" markets the increased rental transactions and retail sales offset the lower level of revenue resulting from eliminating late fees. Additionally, the company will lower its ongoing marketing, operating and promotional costs.
Blockbuster said that including the continued investment in new initiatives and the expected continued softness in the rental industry, operating income for 2005 is expected to be flat with 2004, before about $50 million in marketing and implementation costs associated with the "no late fees" launch.
Blockbuster said late fees would have contributed about $250 million to $300 million to 2005 operating income, which is now expected to be offset by growth in revenue resulting from increased store traffic, less promotional and marketing activity, and increased cost controls.
So instead of late fees, you will be forced to buy the tardy little bugger.
12-14-04, 09:14 AM
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Yes. It seems to be merely a change in their vocabulary. Sounds like it will be utter confusion for consumers who end up unwittingly being charged for the whole movie. "But I thought you have no late fees?!"
This seems to be a popular thing to do these days. Sort of like the "Clean Air Act"
which actually allows for more pollution.
By the way, is this a bargain?
This seems to be a popular thing to do these days. Sort of like the "Clean Air Act"
which actually allows for more pollution. By the way, is this a bargain?
Last edited by TelocZ; 12-14-04 at 09:18 AM.
12-14-04, 09:36 AM
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Originally Posted by SunMonkey
Why is Blockbuster allowed to charge "late fees" and Movie Gallery was sued for doing so?
That said, I have a friend who's brother joined the army and accidentally left a Blockbuster rental in the house. After a few months, they found the tape and returned it, and Blockbuster called and said the family owed them several hundred dollars. My friend's mother just laughed at it, assuming that it was a joke, but Blockbuster pursued them until they threatened a lawsuit.
Post-script is that a class-action suit a few years back, a year or so after that, ruled that Blockbuster *had* to limit their late fees, because they were ridiculously over-charging people.
12-14-04, 09:53 AM
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Blockbuster Dropping Late Fees as of Jan.1!!!! But There is a catch
http://money.cnn.com/2004/12/14/news...ex.htm?cnn=yes
Blockbuster drops late fees
No. 1 video rental chain to give 1-week grace period; says increased business will offset lost fees.
December 14, 2004: 9:23 AM EST
NEW YORK (CNN/Money) - Blockbuster Inc. announced Tuesday it is abolishing late fees on all its video tapes, DVDs and video games as of Jan. 1.
The world's largest video rental company will still have due dates for their rental products -- one week for games and two days or one week for movies, depending on whether it's a new release.
But customers will be given a one-week grace period after that to return the product. After that grace period ends, the chain will automatically sell them the product, less the rental fee. If the customers don't want to purchase the movie or game, they can return the product within 30 days for a credit, less a restocking fee.
Blockbuster (Research) has been competing with the growth of by-mail rental services such as Netflix (Research), which allow customers to keep movies as long as they want in return for a monthly fee. In August, Blockbuster started offering that kind of monthly rental service itself. It said Tuesday that service will continue in addition to this new individual rental policy.
"For the past year, the company has been testing a variety of rental options in markets across the U.S.," it said in its statement. "In no-late-fees test markets, the increased rental transactions and retail sales offset the lower level of revenues resulting from eliminating late fees."
It estimated that late fees would have contributed about $250 million to $300 million to revenue next year.
The company said it also plans to lower its ongoing marketing, operating and promotional costs after implementing the change.
The company said as a result of the move it expects operating income in 2005 to be flat compared with 2004 results after an estimated $50 million it will spend to market and implement the change to a no late fee system.
Analysts surveyed by earnings tracker First Call had forecast that the company would earn 73 cents a share in 2004 and 67 cents a share in 2005. That works out to about a $6.5 million drop in forecasted earnings between the two years.
Blockbuster, which was spun off earlier this year by media conglomerate Viacom (Research), is in the process of bidding for competitior Hollywood Entertainment (Research), the No. 2 video rental chain. Hollywood Entertainment has entered into a merger agreement with buyout firm Leonard Green & Partners as well as Hollywood's top management to take the company private.
Blockbuster is offering $11.50 a share for Hollywood, or about $700 million, and it has said it would be willing to raise its bid subject to a review of company financial information.
Leonard Green and Partners is offering $10.25 a share for the company. Movie Gallery (Research), the No. 3 video rental chain, is also involved in the bidding. Top of page
Blockbuster drops late fees
No. 1 video rental chain to give 1-week grace period; says increased business will offset lost fees.
December 14, 2004: 9:23 AM EST
NEW YORK (CNN/Money) - Blockbuster Inc. announced Tuesday it is abolishing late fees on all its video tapes, DVDs and video games as of Jan. 1.
The world's largest video rental company will still have due dates for their rental products -- one week for games and two days or one week for movies, depending on whether it's a new release.
But customers will be given a one-week grace period after that to return the product. After that grace period ends, the chain will automatically sell them the product, less the rental fee. If the customers don't want to purchase the movie or game, they can return the product within 30 days for a credit, less a restocking fee.
Blockbuster (Research) has been competing with the growth of by-mail rental services such as Netflix (Research), which allow customers to keep movies as long as they want in return for a monthly fee. In August, Blockbuster started offering that kind of monthly rental service itself. It said Tuesday that service will continue in addition to this new individual rental policy.
"For the past year, the company has been testing a variety of rental options in markets across the U.S.," it said in its statement. "In no-late-fees test markets, the increased rental transactions and retail sales offset the lower level of revenues resulting from eliminating late fees."
It estimated that late fees would have contributed about $250 million to $300 million to revenue next year.
The company said it also plans to lower its ongoing marketing, operating and promotional costs after implementing the change.
The company said as a result of the move it expects operating income in 2005 to be flat compared with 2004 results after an estimated $50 million it will spend to market and implement the change to a no late fee system.
Analysts surveyed by earnings tracker First Call had forecast that the company would earn 73 cents a share in 2004 and 67 cents a share in 2005. That works out to about a $6.5 million drop in forecasted earnings between the two years.
Blockbuster, which was spun off earlier this year by media conglomerate Viacom (Research), is in the process of bidding for competitior Hollywood Entertainment (Research), the No. 2 video rental chain. Hollywood Entertainment has entered into a merger agreement with buyout firm Leonard Green & Partners as well as Hollywood's top management to take the company private.
Blockbuster is offering $11.50 a share for Hollywood, or about $700 million, and it has said it would be willing to raise its bid subject to a review of company financial information.
Leonard Green and Partners is offering $10.25 a share for the company. Movie Gallery (Research), the No. 3 video rental chain, is also involved in the bidding. Top of page
12-14-04, 10:48 AM
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I don't know for sure either, but I worked at a blockbuster about 3 years ago for about 8 months. When I worked there, the employees weren't allowed to use the phrase "late fee" when talking to a customer because of the impending lawsuit. They called them "extended viewing fees," apparently because it was illegal to charge a fee unless it implies that the customer is getting something for the charge. In an extended viewing period they are charged for more time watching the video, a late fee implies being charged for something else. I could be wrong about it though. All I remember is saying extended viewing fees.
12-14-04, 10:56 AM
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I always thought they went with "Extended Viewing Fee" because it sounds less negative. You know, typical PR bullshit.
As for this new move, I think it will bite them on the ass. Late fees (or "Extended Viewing Fees") people can understand, but how many people will understand that the cost of a rental DVD is not 20 bucks like at Best Buy, but between 100 and 200?
As for this new move, I think it will bite them on the ass. Late fees (or "Extended Viewing Fees") people can understand, but how many people will understand that the cost of a rental DVD is not 20 bucks like at Best Buy, but between 100 and 200?
12-14-04, 11:38 AM
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I'm pretty sure a rental dvd does cost around $20. It was the VHS that had rental pricing of about $100. And I think even the VHS rental pricing is a lot less than it used to be. I thought that now when blockbuster had to sell a lost tape to a person they charged the previously viewed price.
12-14-04, 11:58 AM
#10
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I don't see a problem here.
At any video store, you are paying to 'borrow' a DVD. When you borrow it, you agree to return it within a certain amount of time. If you don't bring it back, you are now holding onto the store's property that they could rent to someone else. So you are potentially depriving them of money. The Late Fees is just the store's way of getting the money that they could have potentially earned.
With this 'buy the DVD' rule, I still don't see the problem. You have a friggin' week to bring it back before you get charged. That is your fault for not bringing it back. You've had more than enough time to watch it (if not, why did you rent it) and if you are irresponsible enough to not remember to bring it back, you deserve the charge.
Think about it, you have the movie 7 days longer than what you agreed to. Most places charge $3-$4 charge each day the movie is late. So in a week, you could have late fees that equal $21-$28. If would have had to pay that much, you might as well get to keep the movie. Before you would have to return it as well as pay the charge. Doing it this way will keep charges down as in the example of a movie being left at a house for a few months.
At any video store, you are paying to 'borrow' a DVD. When you borrow it, you agree to return it within a certain amount of time. If you don't bring it back, you are now holding onto the store's property that they could rent to someone else. So you are potentially depriving them of money. The Late Fees is just the store's way of getting the money that they could have potentially earned.
With this 'buy the DVD' rule, I still don't see the problem. You have a friggin' week to bring it back before you get charged. That is your fault for not bringing it back. You've had more than enough time to watch it (if not, why did you rent it) and if you are irresponsible enough to not remember to bring it back, you deserve the charge.
Think about it, you have the movie 7 days longer than what you agreed to. Most places charge $3-$4 charge each day the movie is late. So in a week, you could have late fees that equal $21-$28. If would have had to pay that much, you might as well get to keep the movie. Before you would have to return it as well as pay the charge. Doing it this way will keep charges down as in the example of a movie being left at a house for a few months.
12-14-04, 12:17 PM
#11
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I think this new rule sucks, but for a different reason. Because they are giving you one-week grace, no one is going to return their movies on time! Therefore, more movies will be out of stock. So the odds of you finding what you want have just significantly lowered!
12-14-04, 01:01 PM
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I actually had Blockbuster charge my credit card for a movie the other day. I had returned it, but for some reason, it didn't get checked in. Despite calling this to their attention and calling a district manager to lodge a formal complaint (and him saying the matter had been resolved) and even after the store said they found the movie and got it checked in, they charged me $16.99 for The Producers: Special Edition movie disc.
And even then, they had only been claiming the disc was overdue by something like ten days. So, this new policy wouldn't be that much different than the one my store had in place already (just no late fees added in, too).
In my case, Blockbuster did refund the late fees they charged me and the price of the movie they charged me, but it was only $16.99 that they charged for the movie.
And even then, they had only been claiming the disc was overdue by something like ten days. So, this new policy wouldn't be that much different than the one my store had in place already (just no late fees added in, too).
In my case, Blockbuster did refund the late fees they charged me and the price of the movie they charged me, but it was only $16.99 that they charged for the movie.
12-14-04, 05:28 PM
#17
This will cut into 10-15% of their annual profits, and that is a HUGE chunk of money for Blockbuster considering how much money their collective efforts make for them. Do you think they are just going to simply say they are going to make less money because they like you? There has to be more of a catch than they are letting on (seriously, how bad is it to pay for the DVD if you keep it, minus what you rented it for? Sounds like a DVD Bargains theme thread to me! Customers won't have to wait for BBV to pull titles for previously viewed, they can rent them and consider them purchased if they keep them. Not a bad deal at all.) because even at full PVD cost, I can't see how they could make back their money on that.
My guess is that shopping at Blockbuster will turn into a more hellish experience than it was before. I bet that the clerks will be pressured into selling more at the register and they will hammer it over your head more and more. They have already been going in that direction by having people hound you on the floor while you shop and ask you to buy more when you get to the register. I expect those tactics to be increased like it's warfare for more money out of your pocket.
Personally, I would rather pay the occasional late fee than be forced to listen to more sales pitches when I go to the store. I get enough commercials on the phone and am already harassed by telemarketers, when I go to the store I already know what I want to buy and I want to be left the hell alone.
Also, this will probably mean that titles will be out of stock more often. Hollywood was a horrible place to shop because their new releases were never in because people were keeping them five days. Now people can keep movies for TWO WEEKS before any kind of "penalty" is imposed on them? This is the worst move BBV has ever done.
My guess is that shopping at Blockbuster will turn into a more hellish experience than it was before. I bet that the clerks will be pressured into selling more at the register and they will hammer it over your head more and more. They have already been going in that direction by having people hound you on the floor while you shop and ask you to buy more when you get to the register. I expect those tactics to be increased like it's warfare for more money out of your pocket.
Personally, I would rather pay the occasional late fee than be forced to listen to more sales pitches when I go to the store. I get enough commercials on the phone and am already harassed by telemarketers, when I go to the store I already know what I want to buy and I want to be left the hell alone.
Also, this will probably mean that titles will be out of stock more often. Hollywood was a horrible place to shop because their new releases were never in because people were keeping them five days. Now people can keep movies for TWO WEEKS before any kind of "penalty" is imposed on them? This is the worst move BBV has ever done.
12-14-04, 05:51 PM
#19
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Originally Posted by duganrm
soooo, does BB have any OOP dvds in stock? 
12-15-04, 09:47 AM
#21
Originally Posted by wearetheborg
One thing has me worried about rental stores, how do u prove u've returned something? Do u give the dvd to a clerk and see him clear the rental in front of u?
Yes, thats what I do.
