Struggling Blockbuster Eliminates Rental Fees

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Struggling Blockbuster Eliminates Rental Fees

FT. LAUDERDALE, FL—Blockbuster, the flagging video-store giant that has recently resorted to eliminating late fees and waiving replacement fines for lost or damaged movies, announced Monday that it would also be doing away with its long-standing rental charges in an attempt to stay competitive in the ever-changing home-video business.

One of Blockbuster’s 39 Phoenix locations.

According to press releases, Blockbuster’s new nationwide program, "The End Of Fees," promoted using $7 million of the company’s last remaining $10 million, will eliminate all costs associated with DVD rentals as well as per-unit charges for its video games, snacks, carbonated drinks, gumball machines, promotional cardboard standees, and literally anything else a customer comes across at one of its thousands of nationwide locations.

"I’m proud to announce that, starting Oct. 1, Blockbuster customers will be able to take home the hottest new releases for as little as the price of absolutely nothing," said Blockbuster Vice President of Marketing Patricia Waters, whose company's stock dropped nearly 50 percent last year against "On Demand" digital cable and by-mail movie services such as Netflix. "At Blockbuster, the movie-viewing experience has never been more affordable."

"Why rent from anywhere else?" Waters added. "Seriously, let us know of any reasons you may still have for not renting from us, and we’ll remedy them immediately. Immediately."

While two pieces of identification, a valid credit card, and proof of residence were previously required to open an account at the store, customers will now only need to walk through the door of any franchise location, whether by accident or not, and make brief eye contact with an employee to qualify for membership.

Lifting a bullhorn to her lips, Waters added that customers would also be automatically enrolled in the Rewards Membership program allowing them to take part in countless in-store promotions for "only $0.00 more."

Customers taking advantage of the new 50-movies-a-night policy.

"We invite all customers to sign on for a free trial of our Rewards plan, and receive an instant upgrade, at no additional cost, to Gold Rewards status," Waters said.

Under the Gold Rewards Membership, customers can rent up to 50 movies at once as well as be driven home by Blockbuster chauffeurs, who will also install a brand-new 32-inch flat-screen TV upon the first rental.

"Please, we’re just asking for one more chance," added Waters as she dropped to her knees and extended her arms out to the assembled crowd.

Blockbuster, which was forced to lay off nearly one-third of its workforce earlier this year, is hoping the addition of 3,000 new locations will help spark a bump in sales. They also plan to unveil new promotions, including a company pledge to go out and purchase, on the spot, any movie customers cannot find on their shelves, as well as a new policy allowing customers to keep rented material for seven years, and up to 12 if it is not a new release.

"We here at Blockbuster, at least those of us left, are deeply committed to providing customers with the ease and flexibility they deserve," Blockbuster CEO and part-time bartender Jeffrey Antiano said. "That’s why we’re installing our handy ‘Quick-Drop Bins’ next to the mailboxes of nearly 10 million homes."

"And if that’s not enough—which many of us fear may be the case—as a special introductory offer, cancel your membership with Netflix anytime in the next three months and we’ll do literally anything you ask of us," Antiano added. "We mean it."

Barron’s financial reporter Steven Hirsch said that though the new plan is risky, even getting curious potential renters in the door could double the company’s 2005 profits "just from the loose change that may drop out of customers’ pockets."

Miami resident Scott Patterson, however, was only one of many consumers who said they were unimpressed with Blockbuster’s new offers, including "Two-Dollar Tuesdays," in which customers are handed $2 cash for every new release they rent.

"I don’t know," Patterson said. "Something about that place just rubs me the wrong way."