How Blockbuster DVD Rental Is Changing

Blockbuster had small beginnings. The first Blockbuster store was opened in 1985 by founder Dave Cook. They grew the business by establishing niche markets such as high number of single film prints, highly visible stores, and a broader selection of movie titles. This helped them achieve a 27% market share in the United States and more than 6,500 stores. Being the big guy on the block has recently created some stiff competition.

The startup known as Netflix has exploded onto the DVD rental scene in the past five years. Its model has been based on purely online DVD rental. You go to their website and select from their thousands of titles and they are mailed to you. He then looks at your selection and sends it back in the prepaid envelope provided. They didn’t offer late fees, which means you can keep the movies for as long as you want. This gave them an immediate competitive advantage and had adverse effects on box office success. With revenue constantly generated from late fees, Blockbuster had a serious problem to deal with.

Blockbuster’s reaction to Netflix was to form their own online DVD rental program called Blockbuster Total access. It is similar to Netflix and led the company to sue Blockbuster for patent infringement.

Blockbuster Total Access allows DVD renters to choose from several different plans. They all include the DVD that is mailed to you along with the return shipping envelope. Different plans allow you to have a different number of DVDs at any given time and another option, store exchanges.

In-store trade-ins could be the competitive edge Blockbuster DVD rentals need. If you compare to its rival Netflix, they don’t have the infrastructure. There are over 6,500 Blockbuster stores in the US What in-store exchanges do for the customer is twofold. The first is the fact that the customer will get movies that they sometimes don’t like and with Blockbuster DVD rental you now have the option of quickly changing movies at your local store. The second is the fact that movies by mail only arrive on business days. Come weekend, if you haven’t received your new titles, you may be left without a new movie to watch at your leisure. Changes in store are once again the solution.

Blockbuster still lags behind in online DVD rentals, but with competition from Netflix they have tried to adjust their business model. Only time will tell who will emerge victorious.

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