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Blockbuster Brings Back Late Fees

Regrettably, there wasn't room to Photoshop another "the end of" before "late" on this sign.

Blockbuster Video, which loudly proclaimed “The End of Late Fees” a few years back, has quietly reneged on that declaration and begun to reinstate late fees on in-store rentals. This is a departure from the company’s previous policy, which gave renters a 10-day grace period to return borrowed titles, after which a $10 fee was assessed.

According to Home Media Magazine, Blockbuster’s “new-release movie rental period for $4.99 titles has been reduced to five days from seven days, with a $1 per day late fee assessed for up to 10 days thereafter. The $1 daily fee also applies to one-day standard DVD, Blu-ray Disc and previously viewed rentals”.

Cash-strapped Blockbuster is casting about for any revenue stream that it can find these days, and re-introducing late fees (once a big revenue stream for BB) is seen by analysts as an appropriately drastic move by the company. Edward Woo, an analyst with Wedbush Morgan Securities said the following about the new/old policy:

“At $1 per day, it’s very fair and comparable to what Redbox charges per rental,”

Michael Pachter, also from Wedbush Morgan, agreed with his colleague:

“Their [previous] pricing made no sense, and every little bit helps,”

When/if Blockbuster recovers from its current financial woes, will company executives be raising a glass to late fees? How will already soured BB customers respond to this new policy? Tell us what you think in the comments.

(via Home Media Magazine)

41 Responses to “Blockbuster Brings Back Late Fees”

  1. Member [Join Now]
    starman15317

    that sucks, but I don’t go to Blockbuster anymore so I could care less. This just shows that they are a greedy company

    • Member [Join Now]
      Sunu_Thomas [sunu_thomas]

      Since Blockbuster decided to implement “THE LATE FEE CHARGE” they will loose more customers and Redbox is doing great since they don’t have a late fee and because movie rental prices are fairly cheap and decent to rent. “GO REDBOX GO”.

      “Blockbuster is going down the drain.”

    • Member [Join Now]
      realysmart

      blockbuster created their own problems by cutting out late fees. How dumb are they? Late fees accounted for half their revenue stream and by cutting them out they reduced their income in half causing all their problems..Thewy may have been losing customers but they had time to retrench and figure out a stragety, no more late fees fell right into netflix trap..

  2. Visitor [Join Now]
    Mike [visitor]

    seems dumb to me. They spent all this time gloating how they got rid of their late fees and now they bring them back. That’s supposed to attract business? You’re already forcing people to pay for a five day rental fee which usually is more time than you need to watch a movie, then they want to charge the same as redbox if it’s late? What’s the advantage? Come on even Netflix’s business model makes more sense to me.

  3. Visitor [Join Now]
    Vernon Dent [visitor]

    Blockbuster lost ~30% of its revenues when it dropped late fees.

    Maybe NOW it will REOPEN closed stores.

    Or will it?

    • Visitor [Join Now]
      tinybrat [visitor]

      They aren’t opening closed stores, ever. They are in fact closing another 500 locations as part of their “restructuring”. Look back at Hollywood Video and their “restructuring” two years ago and see where it took them.

      Its like filling a leak with a piece of gum, only this leak is about the size of a swimming pool. Its just not going to hold and given enough rope, they will eventually hang themselves.

      Business 101 – First day of class, you learn the most obvious fact. You can not succeed in business if you are paying out more than you are taking in. Eventually the loans will dry up, the creditors will come calling and the only hired help of blockbuster making any money will be their bankruptcy lawyers. If I were an employee of Blockbuster, I would begin prepping my resume before the other thousand employees do.

      • Visitor [Join Now]
        Sean [visitor]

        It’s interesting how Blockbuster revenue went up after yesterday when they released the new policy. People are taking it very well seeing as customers knew they were abusing Blockbuster’s policies. This is the best movie the company could have made. It’s very smart. Once Blockbuster completes the buyout of Redbox from Coinstar, there won’t be any competition. If you’re next comment was that Netflix is competition, please stop yourself. A kiosk or website can’t offer you personal help with selecting movies. A website doesn’t greet you with a smile. What happens when you have a problem with a Redbox or Netflix movie? You call a tech number and they talk to you for an hour before giving you a few free rentals. If you have a problem with blockbuster, you can travel a short distance and talk to a person that can actually help you. You can get your problem solved immediately.

        • Member [Join Now]
          ChadCronin [chadcronin]

          If rude cows kept this paws off the playing side there wouldn’t be issues with discs. I don’t have that many problems and don’t want to deal with people in person to rent a movie. If Blockbuster buys Redboxs I might just give up renting, that would be horrible.

          • Visitor [Join Now]
            rb [visitor]

            Odd you should say you prefer not to deal with people in person to rent a movie… I just read an article about Best Buy putting vending machines in airports, etc. that you can buy expensive electronics ( probably digital cameras, etc)from the machines. Article said the Best Buy machines have been very successful with customers because Best Buy determined that many people prefer not to have to deal with people/clerks/employees to purchase items they have predetermined they want to buy. Article went on to mention the success of Redbox/kiosks vs brick & mortar stores where you’re forced to deal with clerks, etc.

        • Visitor [Join Now]
          Noah [visitor]

          I am not sure what store you go to but seems like most people are at a Blockbuster aren’t that helpful, but to be honest I am the type of customer that knows what I want and generally don’t want or need to be helped. I have never had any problems with Netflix, if I do happen to get a bad disc, I got to the website, mark it bad and they send me a new one. No need to even leave the house. To me it seems more inconvenient to go to a store, rent a movie, go home, find out it is bad, go back to the store and hope you get a good one this time.

        • Visitor [Join Now]
          tinybrat [visitor]

          So, where do you get your drugs from?

          Blockbuster buying out redbox? You look high in your photo, you sound high in your writings. Its idiots like you who make up stupid rumors like that and get everyone thinking that you have some idea of what you are talking about. Blockbuster is a billion in debt, redbox/coinstar had over a billion in earnings in ’09, please oh mighty high, share with us your thoughts on how blockbuster could afford a candy bar much less a multi-billion dollar takeover.

          This should be good… I’m waiting…

        • Visitor [Join Now]
          Brad [visitor]

          Dude, what planet are you on? Yes, their revenue went up – they assessed charges to all who where holding on to their overdue rentals. The best movie company ever made? Hardly! They bullied the industry for years and over-charged their customers (ever bought a new dvd there?). How is that best?

          As far as buying out Redbox – keep dreaming. That was just a what-if scenario, not a done deal. They no longer have the capitol for such a large investment. They are on borrowed time as it is (look at Hollywood Video).

          Customer service? I tended to know more about the movies when I did visit them than their teen staff seemed to, save the manager. He and I would compare movie reviews and recommendations but he was BY FAR the exception. In fact, at the last one I visited I asked if they had in-stock a new release and they had no clue. They went as far as to eventually tell me they did not have the movie – until I located it on the shelf and presented it to them. oops!

          Problem disks? I have VERY FEW problems with disks and when I do I go online with netflix, report it and they ship me another copy without waiting for me to return the bad one. I don’t want to have to drive somewhere and interact.

          And lastly, a short travel???? They closed 9 stores in my surrounding area. The nearest one is now a 30 min drive and it is the ONLY one for the region. No thank you.

      • Visitor [Join Now]
        Vernon Dent [visitor]

        Sorry tinybrat…

        You missed the sarcasm of the post. Blockbuster foolishly eliminated the best money maker it had with its late fees. Finally it figured it out!

      • Visitor [Join Now]
        rb [visitor]

        I think if Blockbuster closes all their brick & mortar stores and puts all its money (LOL) into its BBExpress kiosks it can come back from the dead. It needs to concentrate on one thing and do it well. It could then rival Redbox whereas Redbox and BBExpress would become like the McDonalds and Burger King of the fast food world. Both could be successful in their own right.

  4. Visitor [Join Now]
    kradberg [visitor]

    I was at Blockbuster last night in Buffalo, NY (using a coupon, not wasting money).

    In that store all rentals are now $4 for 4 days and $1 per day after that.

    It was funny, the clerk actually said, “so it’s just like Redbox, but with a 4 day minimum”. I had a hard time not laughing.

  5. Visitor [Join Now]
    tinybrat [visitor]

    I love the line about it being comparable to Redbox in price now. No, $5 for 1 movie is not comparable. Just because you give it to the customer for 5 days which makes it $1 per day is not the same as getting 1 movie for $1.

    Late fees will raise some capital for Blockbuster, but it will anger a lot of people who were keeping movies for long periods of time without the worry of late fees.

    Blockbuster is attempting to collect as much cash as possible before finally shuttering the doors for good. Their kiosk business is off to a terrible start. Their mail order business sucks. Their brick and mortar stores are dragging them down. How do you recover from a billion dollar debt? $1/day late fees? Nope, you recover (partially) but closing your physical locations, laying off your workforce and finally, by filing bankruptcy. They’ve already done the first two, now its time to look at option 3, bankruptcy, which by the way, they just hired “restructuring” lawyers to do just that.

    • Member [Join Now]
      tokaldoo

      so basicly, what your saying is, its ok to take advantage of people? Blockbuster tried to win people by eliminating late fess (which i need to add, the OP of the story was incorrect about how the new fee worked, it wasnt a $10 charge, you were charged for the movie after keeping it for 17 days, and if you returned it within 30 days you got that money back, minus a $1.25 restocking fee) Those people that kept the movies out for longer periods of time are the reason Blockbuster has been doing poorly. I hated going in and there being no movies in stock. NOT because BB didnt stock them, but because people had them out for 2 weeks. Everyone likes a deal. but remember, take advantage of something too long and it goes away, just like your ex

    • Member [Join Now]
      realysmart

      People rent for all reasons, Blockbuster store do present a certain value and some people donot care about the price. They want the movie when they want the movie. I donot like standing outside in the snow waiting to get to the redbox machine. Kiosks donot carry catalog tittles also. Their selection is small and the screen is tiring and cumbersome. I admit their stragety is too late and reactinary. They are running the company into the ground. I had their online subscription and they did everything to push me out the door. Then they spend all sorts of money trying to get you back as a customer at a poorer rate.I will never subscribe again. Netflix is also starting to get bad and are treating customers poorly, thats a sign that kiosks do make a difference..$1.00 isnt the magic number but people will go out of there way and stand in the cold to rent at that price..The reccession has something to do with it also, the studios gripe about poor dvd sales but I think 10 percent unemployement has a lot to do with that and also Blu-ray is getting big. I don’t think people want to invest in DVDs when Blu-ray is the next big thing..When Blu-ray tittles get more reasonable I believe their sales will also increase.

  6. Member [Join Now]
    MovieWatcherSupreme [moviewatchersupreme]

    Man this is gonna suck for existing customers, that was like one of their big selling points too. I understand why they did it, but if I was running a failing company that wouldn’t be my first move. Well it isn’t their first move, but it shouldn’t have been on the table at all.

    Oh, and their wasn’t enough room to edit this picture?
    o rly?
    http://www.myfilehost.net/file/790/custom-latefees-jpg
    how about that huh?

    • Member [Join Now]
      MovieWatcherSupreme [moviewatchersupreme]

      I know that link seems suspicious, but I promise it is just the edited picture I uploaded to a free file hosting site. Now I know the promise of a random internet person doesn’t mean much, so it is your call, it is a funny pic.

  7. Visitor [Join Now]
    Firstlawofnature [visitor]

    From a business perspective I think it’s probably the most intelligent thing they have done in 6 years. It ain’t pretty and isn’t great for consumers but it’s a far more realistic of a way trying to grow. Better to have higher prices in stores than some hair brained idea of trying to compete with netflix or redbox.

    • Member [Join Now]
      MovieWatcherSupreme [moviewatchersupreme]

      I can see you point there, it is better on paper for big execs then it is for consumers. But sometimes things just have to go down that way.

  8. Visitor [Join Now]
    Sean [visitor]

    I love how everyone here is completely missing the bigger picture in things. Everyone is seeing it as a one-sided issue. Out of 3,000 stores, only 200 got rid of late fees. These stores are part of test markets. Now, let’s do some simple math. Given that a customer has the Rewards program, they can’t have 5 paid rentals and that gives them a 6th free rental. Customers abused this policy by going in, renting 5 $.99 movies and then using the free one on a $10 game. The company was paying customers $5 to rent titles essentially. On the topic of late fees, it’s not a late fee. It is your choice to keep the movie out. Five days is plenty of time for me to go home and watch a movie. The previous policy involving a grace period only meant that a person could rent a movie for $.99, keep it for 10 days, let it sell off on the account, and then return it 10 days later only to pay a $1.25 restocking fee. When any customer went in to rent a movie, it wouldn’t be there because some idiot is getting his 20 days worth out of a dollar. The bottom line is that Blockbuster gave customers a lot of slack and all they did in return was abuse the policy. I think that the ADR fees is a great idea and it’s a great deal. If you don’t want to pay the $1, get your movies back in time. Blockbuster is the only company that manages to survive in these times. Now that Netflix and Redbox can’t rent new titles for the first 28 days, Blockbuster will excel in the rental industry. Blockbuster pays a percentage to production houses for the first month and Redbox refuses. Coinstar is done with and no one wants to purchase Redbox from them.

    • Member [Join Now]
      ChadCronin [chadcronin]

      So are you a BB whore, I mean employee? There are not gonna excell. They are a sinking ship. I don’t give a… about the 28 days. I’ll wait for Redbox. If BB was dumb with their rental programs or return policies that’s their fault. Going to a special store just to rent a movie seems very outdated. I hope they go bankrupt already so I can stop hearing about them!

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      ‘Now that Netflix and Redbox can’t rent new titles for the first 28 days, Blockbuster will excel in the rental industry.’

      The term wishful thinking comes to mind. Redbox and Netflix are going to do something like $3 billion in revenues between them. The last nail in the BBI coffin is getting hammered as we speak. BBI excels at stores and nothing else.

      • Visitor [Join Now]
        Whatever1 [visitor]

        LOL this is funny most people are too busy to rent and wait at BB to get a new release as soon as they come out most people take about 2 weeks to get new releases. I don’t know how many times I have gone to our local BB and they are sold out of the new releases the first week or so. It is worth the wait. Plus you don’t have to deal with a pissy teenager at the counter or wait till the store opens to get a movie. You can also return a Redbox movie to any Redbox. You can Rent a movie at the airport take a flight in Cali and return it in NY. You can rent from Redbox in on town and return it to another. You can’t rent from one BB in one town and return it to the next BB in the next town or they yell at you to return it the original BB you rented it from.

    • Visitor [Join Now]
      Noah [visitor]

      In a world where people have so many options of where they can rent movies, BB should be doing everything they can to keep customers. When it comes down to it, BB needs us more then we need them. I think one way to not keep customers is bring back late fees, regardless if it makes sense logically, people aren’t going to like it, won’t rent and BB will be no more.

    • Visitor [Join Now]
      tinybrat [visitor]

      If you work for blockbuster, I’m guessing you are a stock boy, judging by your photo that your mama took. You should be in politics though, because you can blow so much smoke out your ass! Seriously dude, blockbuster is closing stores (500 more just announced) while redbox is opening a new location every hour. Netflix just hit its highest stock price yesterday, blockbuster is at 30 cents for crying out loud. Even the pennystock websites are telling you to stay away from blockbuster, they can’t get people to buy their stock at 30 cents!! Their top boardmember pulled out two weeks ago, what does that tell you? Oh, I forgot, you open boxes and put movies on the shelf, so you obviously have all the inside info that we are not privvy to.

    • Member [Join Now]
      starman15317

      Sean, you’re a troll. I hate trolls. There is no way that BB is better, so you can f**k off!

      • Visitor [Join Now]
        John Small [visitor]

        Well, BB does have a better selection of movies to rent so that does qualify it as better.

        Which makes you either mistaken or a liar.

        Either way you are rude and uncouth.

    • Member [Join Now]
      amtj03

      Ok I don’t know what bb you work at, oops rent from, but there are not a lot of .99 rentals. I was a bb customer for 10 years, even had the bb online service. Rentals keep going up and bb online service was horsesh*t. I would spend $20 a week to rent 4 movies, kept them for no more than 7 days and do it over again each week. That was $80 a month plus the reward service every year and not including gas. If I got there at 10 am on certain days I might could find a helpful employee. The new bb online is so expensive and I wait 3-4 for my movies. Now I pay 18 a month(3 out) from netflix and I get around 20-24 movies a month. Plus I get instant streaming free and they put new shows and the indie movies I love, that redbox doesn’t have, on there for free. Oh now thanks to my Roku device, I have amazon on demand. So while netflix and redbox have 28 waiting period, I don’t. If I am desperate I can rent those new releases from my home for 1.99-3.99. It is cheaper then the price of 1 theater movie and I don’t have to worry about late fees or gas.

      • Visitor [Join Now]
        John Small [visitor]

        The argument is not just about pricing but about selection. BB has a better selection of films than Redbox. That is undeniable. Whether that is worth paying slightly more for them is up to the individual.

        As indicated above, there are plans within BB that will allow you to reduce your costs instead of paying full price.

        Or you could do the smart thing and find a good indie store that will have an even better selection of films, lower prices than BB and help support your local economy.

      • Visitor [Join Now]
        Firstlawofnature [visitor]

        Sounds like a very smart plan to me. The netflix distribution center that sends you DVDs supports the local community as well if that is something you care to think about.