Lift, shift and retention! Blockbuster got the lift part correct. They were genius in creating plans that lured customers away from Netflix. Then they made the plans so great that customers fell in love with them. And then they cranked up the price 32% and are watching this customer shift on back to Netflix.
I was one of the millions that left Netflix and jumped on the Blockbuster bandwagon. I like to think I was responsible for the almost $1 jump or 15% increase in Blockbuster's stock price over the last couple months as well. But, as many big businesses do, they got greedy. They shouldn't have. They had my $14.99 a month for two movies at a time with unlimited exchanges at the store. The exchanges I loved. I found myself overwhelmed with movies at some points. It was a challenge to just catch up half the time. It was the perfect program, that is, until the email from them came.
Blockbuster sends me a note letting me know that I need to pick a new plan or starting next month, my current plan will jump to $21.99. That's one heck of a jump. Over the course of a year we are talking an $84 price hike. That's 24 Cafe Mocha's I could lose out on. Don't get me wrong, I'll throw money around on the web as much as the next guy, but when things become a matter of principal, you have to say enough is enough.
If you're a new subscriber to their plan, you won't see this price as they don't offer unlimited exchanges to new members now. A new $14.99 member gets two at a time rentals through the mail, but is allowed only three in-store exchanges a month. On top of that they took away the free monthly coupons for new members.
I was caught off guard, confused, betrayed and was hurt by what my beloved, loyal movie dealer was doing to me. In haste I opted to stay at the same $14.99 a month rate, but was dropped to only one at a time, while still getting my unlimited exchanges (only for current subscribers). They got me. They roped me in and punched me in the face.
Well last night I punched back. An email from my long last friends at Netflix hit my inbox. They are offering me unlimited access with two at a time for $13.99 to come back. Yes, I lose the pleasure of hitting the local BlockBox and giving a smirk as I think I am getting away with stealing as I simply exchange a movie with no money trading hands, but, but, but, I save money and win, right? Sure I do, but where I really stick it to the man, is with how Netflix on top of my mail movie access will also allow me to download a movie to my laptop as part of my two at a time. Blockbuster doesn't offer that do they?
What Netflix has given me is basically, unlimited movies at any time. My wife and I will get the popular movies in the mail as usual, but the movies I want to watch and she doesn't, I'll simply download them anytime, anywhere I want and watch them at my leisure. On plane (soon to have wi-fi), in a train or during a cross country trip. Oh, if I had kids I would be the father of the year. In all seriousness, if I'm in Tulsa on a business trip, there is no longer a need for $11.99 movies (clean I promise) at 9:00 at night. I simply log into my Netflix account and download the movie of my choice. When I'm done, I can do it again. This is access anywhere at anytime. Can't get that with the BlockBox trips.
A quick comparison of rates:
Blockbuster - $14.99 a month = 2 at a time unlimited mail, with 3 in-store exchanges per month.
Netflix - $13.99 a month = 2 at a time unlimited mail, with unlimited PC downloads.
Movies at my fingertips does beat the trip up the street in my book and again, sticks it to the man. Also, thanks for the extra cash Blockbuster, I took my modest 15% gain in three months and sold all my Blockbuster stock last night. More Cafe Mocha's for me!
1 comment:
Interesting, they really put the shaft on you.
No mention of Red Box though? Pushing $1 a night DVD rentals, and strengthening distribution at Walgreens. Coinstar Stock (parent of Red Box) is up 22.64% for year vs. Blockbuster's +30.26%.
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