As for an Amazon-Blockbuster partnership, it make a lot of sense. Blockbuster already has 4,5000 "distribution" centers and it allows Amazon to leverage its core competencies.
Blockbuster is eliminating its late fees...sort of. Smart move. While I am not a NFLX subscriber, I have toyed with the idea because I generally end up returning my movie rentals late.
chicagotribune.com
Blockbuster Plans to End Late Fees in 2005
By Associated Press
Published December 14, 2004, 10:54 AM CST
DALLAS -- Blockbuster Inc., the nation's biggest movie rental company, plans to eliminate late fees on games and movies as of Jan. 1.
But there is plenty of fine print, which suggests that Blockbuster is still struggling to come up with a formula to blunt the competitive threat from NetFlix and cable operators' movies on demand offerings.
Its shares rose 16 cents, or 1.8 percent, to $8.96 in late morning trading on the New York Stock Exchange -- near the lower end of its 52-week trading range of $6.50 to $19.37.
Blockbuster announced Tuesday it will continue to set due dates, with one week for games and two days or one week for movies. But the company will give customers a one-week grace period at no additional charge, starting on New Year's Day.
Renters who keep the movies or games longer than the grace period will be charged for purchasing the DVD or tape, Blockbuster said. Customers will still be allowed to return the movie or game over the next 30 days for a refund of the purchase price but will be charged a "minimal" restocking fee, the company said.
"Doing away with late fees is the biggest and most important customer benefit we've ever offered in our company's history," John Antioco, Blockbuster Inc. chairman and chief executive, said in a prepared statement. "So as of the first of the year, if our customers need an extra day or two with their movies and games, they can take it."
Officials of the Dallas-based company also said Tuesday they expect continued softness in the rental industry and flat operating income in 2005 compared with this year before the estimated $50 million costs of marketing and implementing the late-fee elimination policy.
Blockbuster said it has tested the new program in some markets and found increased rental transactions and retail sales offset the decline in revenue resulting from eliminating late fees.
For the full year 2005, the Company projects that late fees would have contributed approximately $250 to $300 million to operating income. But it said that is expected to be offset by growth in revenues due to increased store traffic, less promotional and marketing activity and an increased focus on operating expense management.
Blockbuster has more than 4,500 company-operated and participating franchised stores in the United States.
Copyright © 2004, The Associated Press |
