Angry Blockbuster customers may be the best Christmas gift for Netflix

December 20, 2007

Angry Blockbuster customers may be the best Christmas gift for Netflix In an attempt to cover some of its less profitable customers, Blockbuster is raising rental prices for a number of the mail order customers.  From the reaction on the web thus far, Netflix may be smiling from ear to ear.

In an email sent out to Blockbuster customers last night, they were informed that with the next billing cycle, prices would be increasing for some of them.  The worst hit were the ones paying $24.99 for the Total Access plan that allows them an unlimited number of in-store exchanges.  The new price for this top tier membership is jumping 40% to $34.99, and it appears that no new customers of this plan will be accepted as it is no longer on the signup page.

While there are some other small price increases, none of them are as significant at the top tier one, and it appears they have also completely eliminated the 4 DVDs at-a-time plan from any more sign-ups.  (Full disclosure: The one this author is signed up for, and I was notified I could continue on this plan with no price increase since I do not use in-store returns)  The signup page is still showing the unlimited in-store exchanges at $24.99 a month oddly, though one would assume customer would be quickly notified of the new price.

Total Access grew out of the all-out war that was happening between Blockbuster and Netflix for subscribers.  The largest advantage Blockbuster had was their chain of retail shops, so including them in the plans made sense to lure away Netflix subscribers.  This seems to have backfired somewhat as they didn’t count on people such as the one Ars Technica mentioned who got his rental price per disc down to $.36 by returning 200 movies to the store.

The email sent to customers says that this price increase is to “continue to bring you the unmatched convenience of both online and in-store DVD rentals”, but it would seem it’s more likely to cut the unprofitable customers from their balance sheets.

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