Blockbuster offers new deals for free rentals
EmptyLooking to shift momentum away from fast-growing Netflix, Blockbuster began giving online customers more free movies Wednesday.
The giant bricks-and-mortar video rental chain is letting its Blockbuster Online subscribers return movies they have received through the mail to one of the company's more than 5,000 participating stores. When they do, they're allowed to immediately choose a free movie rental to take home with them, plus the next movie atop their online queue is mailed to them.
Because all of Blockbuster's subscribers, including those at the cheapest $5.99-per-month level, will be upgraded to the new service dubbed Blockbuster Total Access, the company effectively has changed the name of its service.
Subscribers still will get their monthly coupon for a free in-store movie rental and they are still welcome to return their movies via the U.S. mail.
"Customers shouldn't have to choose between renting online versus in-store, and they should never have to be without a movie," Blockbuster chairman and CEO John Antioco said.
Blockbuster, battling devastating competition from Netflix for several years now, said Wednesday that it added 150,000 subscribers in the most recent quarter to its online service for a total of 1.5 million. While that is 50% more subs than it had a year ago, Blockbuster rival Netflix has 5.7 million subs after adding 493,000 in the most recent quarter.
Blockbuster also said Wednesday that it will better take advantage of its physical presence -- Netflix is purely an online entity -- by allowing store customers to instantly sign up to Blockbuster Total Access, facilitated by equipping 5,000 Blockbuster stores with online wireless access for store employees.
"Total Access will help us achieve our goal of 2 million subscribers by year's end," Antioco said.
Wall Street gave Blockbuster a guarded vote of confidence Wednesday, bidding shares of the long-suffering stock up 2% to $4 during the regular trading session and another 1.8% in after-hours trading.
"In a best-case scenario, Total Access would reduce shipping costs, increase in-store cross sales and help Blockbuster capture more online subscribers," Citigroup analyst Tony Wible said.
The analyst maintained his "buy" recommendation on the stock and his $5.50 price target.
Looking to drum up a little PR for the new product, Blockbuster has enlisted Jessica Simpson who, along with Antioco, officially will announce Total Access at an event today outside the Kodak Theatre at Hollywood & Highland.