El Jeffe’s Lounge: Back to Blockbuster

Netflix is free to do whatever it wants, but when the company announced a 60% price increase starting last month, it left a sour taste in my mouth.  At the time, I had just dropped down to the one DVD at a time plus streaming plan in order to save money.  My $10 subscription jumped back up to $16, and I was getting less out of the service.  Netflix offered nothing in return.  I hoped for a promise of earlier DVD releases and streaming content, but instead Netflix assumed it had my money because it was the only player in the game.  Long story short: Netflix was partially correct.  It still gets my money every month, but not as much as before, because Netflix isn’t the only player in the game, just the biggest.  And biggest isn’t always best.

Long before I was a Netflix subscriber, I was a regular Blockbuster customer.  Heading to the video store and renting some movies was a big part of my youth and often a highlight of my day.  New release Tuesday was my church Sunday.  And it wasn’t just Blockbuster; I used to have better options, but Blockbuster slowly wiped out the independent stores.  Prices rose, but I stuck with Blockbuster because I didn’t have any other options.  Even at nearly $5 a rental, it was still cheaper than buying a movie.

Then Netflix arrived, and it offered a better, cheaper, more convenient DVD rental service.  For $5 a month, I could rent one DVD at a time (as many as I’d like!), and it mailed the discs directly to my house.  Netflix kept getting better and better, eventually adding streaming service, so I could now watch thousands of movies any time by streaming through my consoles.  You know the story.  Blockbuster did nothing to respond.  It continued to charge the same prices and act as if Netflix (and other options) didn’t exist, or at the very least, that it wasn’t a competitor, until it was too late.  You should see a pattern forming here.

There is an amusing story my regional director, a former Blockbuster manager, likes to tell, and I’m not sure if it’s true, but I tend to believe it.  He claims this little startup company came to Blockbuster with this crazy idea: rental kiosks.  These guys wanted to sell Blockbuster the idea, or partner with them in some way.  Blockbuster laughed in their faces.  They became Redbox and helped to bring down Blockbuster.  At its height, Blockbuster had more than 1,700 stores and 60,000 employees.  In 2010, Blockbuster filed for bankruptcy.  The company is now owned by Dish Network, and a remaining 600 stores are on life support.

Most of the Blockbusters by me closed down this spring, but a few remain.  In the midst of the Netflix price hike, I received some junk mail.  Normally, I just toss the ads in the trash, but one stuck out somehow.  It was a small ad from Blockbuster with the slogan: “Netflix is raising prices by 60%.  Goodbye Netflix, Hello Blockbuster.”  Something like that.  It contained a promo code for a free month Blockbuster Total Access.  I figured I’d try it out.  The basic plan was only $10 a month, which is exactly what I was now paying for the DVD portion of Netflix.  I signed up for the free month and went straight to Twitter to ask questions about how it worked.  Many of my friends had been telling me about Blockbuster Total Access for awhile, but I hadn’t listened, mostly because they hadn’t been emphatic enough.  You have to hit me over the head to get me to change my ways.

My free month ends on Oct. 16, but I’m going to stick with Blockbuster Total Access for $10 a month.  I’ve dropped my Netflix DVD subscription completely, but I’ve kept Netflix streaming for $8 a month.  When you add it up, I’m paying $2 more per month for my combined Blockbuster Total Access and Netflix streaming package, but I’m getting more out of it, specifically on the DVD end.  If DVDs are all you use Netflix for, switching to Blockbuster Total Access is a no brainer.  Blockbuster gets many new releases almost a full month before Netflix, and you can do this magical thing called in-store exchanges, something Netflix can’t offer.  Yet.

When I finish watching a DVD I receive in the mail, I bring it back to a physical brick and mortar Blockbuster store, and exchange it for any other movie, new release or classic, DVD or Blu-ray.  (Blu-rays plans still cost more with Netflix.)  I can even rent video games if I want.  When I’m done with that rental, I bring it back to Blockbuster, and it sends me the next movie in my queue through the mail.  It’s essentially like having two DVDs at a time (with the option of Blu-ray) for only $10.  The only hassle is having to bring the in-store exchange back to the store instead of drunkenly stumbling to my closest mailbox at 4 a.m.  Well, there’s that, and being hassled by Blockbuster employees to sign up for a more expensive in-store plan.  If retailers had any idea how badly they’ve driven smart consumers to the Internet, they might rethink how they conduct business.  With so many options out there, many of them more convenient than a brick and mortar, the focus should be almost solely squared on providing exceptional customer service, not pushing loyalty plans down customers’ throats.  But I digress.

It would be easy to accuse Netflix of suffering from the same big kid on the block syndrome that brought Blockbuster to its knees, but that’s only part of the problem.  Blockbuster did whatever it wanted and failed to adapt to a changing world until it was too late.  Netflix is doing whatever it wants, but it’s almost too forward thinking with recent changes.  As recently as last month, CEO Reed Hastings announced via Netflix’ blog, that it would become streaming only and separate its DVD rental service into an independent subsidiary named Qwikster.  I’m sure the thinking was that streaming is the future, so let’s cut off the malignant half of the business and let it die.  Netflix was trying to adapt to the future before it arrived; it was trying to see where the puck was going.

Netflix didn’t anticipate the backlash.  Like me, others abandoned Netflix in droves, and the stock dropped by multiple percentage points day after day.  You know what’s better than having to log into two separate sites for DVD and streaming services?  That’s right, having them combined into one site like it was before.  This month, Netflix announced that it was scrapping its Qwikster plan.  Netflix listened, and that’s even more important than adapting or staying ahead of the curve.

However, Netflix still has its DVD and streaming options separated into two separate packages for an overall price hike.  The Qwikster plans of adding video game rentals have not been addressed.  All around, the company looks like it’s scrambling to recover from a harsh blow to the ego, and I think that’s a good thing.  If you think you’re infallible for too long, you start to do stupid things.  If you’re desperate, you try to win people back, like Blockbuster is doing.  Hopefully, you learn from your mistakes.

For now, I’m sticking with Blockbuster Total Access for DVDs.  I never realized how much I missed going to the video store.  Sometimes, it’s good to get out of the house, if only for a brief moment, before I go back home and watch movies.

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Author: Jeff Derrickson View all posts by
Jeff Derrickson is a member of the Perfectly Sane Show and co-host of Movie Dudes. He studied English and mass media at Northeastern Illinois University.
  • Boots_33

    I like the Kevin Smith/Gretzky reference.

    Most of your points are valid and, with you being a movie buff, I can understand your need for quicker access to new releases, so for you it makes sense to stick with BB.

    For me, it’s a different story. I signed up for BB when I found a job so I could pay less than GameFly for game rentals, but it’s a terrible service for that. New release games take THREE MONTHS to be available for rent, and some games aren’t even available (Castlevania:LoS on Xbox). Even still, it takes 5 days for my next game to arrive after i’ve sent the last one. Plus no perks to buy games used.

    Movie-wise, I assume the shipping time would be the same, so fuck that. Also, I feel like Netflix offers a better selection of TV shows and obscure DVDs, like concert or wrestling stuff, so I’ll keep my Netflix DVD account. Once I get done with the current BB games I have, I’m finished with them. Plus, if things get too spendy, I’ll drop the Netflix streaming, since I barely ever use it. If/when Netflix adds games to the service, I’ll likely upgrade to more discs and not need anything else.

    But the thing I like is that we all have a choice, and when you were unhappy with Netflix, you didn’t piss the bed… you just left and took your business elsewhere. That’s the best way to handle it all, I think. Find your best option and run with it.

  • Jeff Derrickson

    Boots_33, Blockbuster’s disc mailing service is as good as Netflix, at least in my experience so far. Not sure about the whole video game angle because I don’t have to worry about it (also, why I didn’t talk about it mroe), so that sucks if that’s your experience. I will agree with you, though, that Blockbuster’s DVD selection is not as good as Netflix’, something I should have mentioned.

  • rose

    The Total Access Plan was an awesome deal and Blockbuster just keeps coming out with better deals all the time. With my provider/employer DISH Network I have the Blockbuster Movie Pass. You should really try it out, because for the same price $10 a month you get everything the Total Access Plan had plus streaming. You can’t get any better then that.