Wednesday, March 30, 2005

Day 46

I had to stop by Blockbuster this morning to drop off a DVD, and I stopped by the nearby Taco Bell and found 2 pennies.

I really don't understand Blockbuster's new No Late Fees policy, in regards to their business. I do understand that they are trying to compete with companies like Netflix, but I don't see how getting rid of late fees is good for their business. They are already starting a program of providing movies by mail, much like Netflix. I would think that it is better for them to promote that end of their business and try to compete with Netflix directly, while keeping their store locations for people who are uncomfortable with the movie by mail system.
But in getting rid of late fees, they are losing a MAJOR revenue source, and since they are promoting the No Late Fee deal, they are NOT promoting their movie by mail line.
I would think that they would need the Late Fee revune to compete with Netflix. And that it would be better to spend their money promoting their competing business with Netflix, and try to drive them out of business, instead of promoting their new No Late Fee policy, for which they are being sued.

Total for the Day - $0.02
Total for the Race - $13.56
Change Finding Streak - 32 Days

1 comment:

Chris said...

The Blockbuster thing makes sense to me, sort of. If you don't return the movie in 7 days you have to buy it, or pay a $1.25 "restocking" fee. That was intended to be the revenue. However, since they were sued they were forced to give that up. I think they wanted the $1.25 and that would compensate for late fees since lots of people would keep movies a long time. Now, they are SOL. There was an interesting article about it today in the Business section of The Houston Chronicle.