Blockbuster Changing Pricing Again

Blockbuster is at it again. They just raised their prices / lowered their service a few months ago to the anger and dissatisfaction of a number of people. This time, they want to raise my plan, the three-at-a-time-with-five-in-store-rentals plan from $17.99 to $19.99. Details will not be posted on the website until 12/27/2007, so I don't know what they've done to other plans. If they had not just changed their plans, I would have been bummed, but probably would have figured that costs go up and that it was still a good deal. As it is, I am still bummed about the last time they switched plans. I have no clue if NetFlix will be raising prices. If not, NetFlix is making even more sense, especially since I have a computer that runs Windows and so can utilize their online streaming.

I have sent the following e-mail to Blockbuster through their online support. I suggest that others who are upset by this send similar letters.

I just received an e-mail in my box tonight that has me quite disappointed with your company. Let me go back a few years. Before Blockbuster Online opened, I participated in the unlimited in-store rentals. It was a little pricey, but given that I was a bachelor at the time, it worked well for me. At some point, Blockbuster Online allowed two coupons per month for in-store rentals. I liked the idea of being able to still choose movies "on demand" so I switched to Blockbuster Online since it was cheaper. I was happy with the system. It worked well. Then, a switch came and we could get two movies a month or one per week in-store. I switched to the one per week, quite happy that I could now get four movies "on demand". Sometime after that, you went one better... unlimited rentals, so long as I had a mailer and if I didn't have a mailer, I still got one freebie. At some point in there, there price went up from $14.99 for three at a time to $17.99. I wasn't too happy about that, but looking back, that was the best deal you offered. Following that, things started going downhill. Just a few months ago, you announced that for me to get the same level of service I had been getting (3 movies per month with unlimited in-store rentals), I would have to cough up an additional $7 per month (a whopping 38.9% increase!) I started looking into NetFlix, but ultimately decided that even though I wasn't happy and felt like I was subject to a bait-and-switch tactic, I had too many movies in my queue to save a buck per month by switching to NetFlix. Now, I get another e-mail in my inbox. To keep the same level of service that I currently have, it's going to cost me $2 more per month. I still haven't fully gotten over the last price increase / drop in service and now you're throwing another one on me (and other subscribers)? From what I've seen, NetFlix is cheaper and has a better selection. I can watch video streamed to my computer so I don't need to worry about a title being out of stock at the store. If I feel a need to get a DVD, the grocery store has a box with DVDs at $1 per day. My reason for staying was that I liked the in-store rentals and it wasn't worth re-creating my queue at NetFlix when I don't normally get much more than 5 in-store rentals in a month. Given that it appears you are trying to milk your customers for more money (have costs really gone up $2 per subscriber in the past couple of months?), I am seriously considering switching to NetFlix even though it will take me some time to get my queue switched over. Keep treating your customers like trash and we'll eventually leave.

I realize that the first person to read this will likely not have the authority to alter pricing. I can only hope that this e-mail and others like it will find their way to the people who do have the power before too many people leave. I've been a loyal Blockbuster customer and am not looking forward to leaving.

UPDATE 1: Blockbuster responded:

Thank you for contacting BLOCKBUSTER Online Customer Care.

I sincerely apologize for the inconvenience this has caused. Our goal is to strike the right balance between providing great value to our subscribers and getting a fair return for the company and our shareholders. We want to provide a variety of subscription plans to meet the needs of all our customers, both in-store and online. It's important for us to give consumers the most convenient access to media entertainment, whether that’s through our stores or by mail, and are dedicated to doing that with flexible plans and pricing.

We've reviewed our pricing structure and have found that to get a better balance of providing great value for Total Access subscribers while still making it affordable for us, as of December 27, 2007, we have restructured the prices of our Total Access subscription plans.

Please note that we're not changing any plan benefits; you'll continue to get all the same great benefits and value from Total Access. Of course, you're always free to change your plan.

Please let me know if you have any additional questions, and I'll be happy to assist.

To which I responded:

Can I get a list of what the different plans will cost? The e-mail said the website won't be updated until the 27.

I'll post what I get back from them here so others can make their decisions on whether or not to switch to a different plan or drop Blockbuster altogether.

UPDATE 2: Blockbuster responded with the new plan prices. Old plan prices are in brackets

Total Access Premium (unlimited in-store exchanges):
1 at a time: $21.99 [was $16.99, a 29.43% increase]
2 at a time: $29.99 [was $21.99, a 36.38% increase]
3 at a time: $34.99 [was $24.99, a 40.02% increase]

Total Access:
1 at a time (2 in-store exchanges per month): $11.99 [was $9.99, a 20.02% increase]
2 as a time (3 in-store exchanges per month): $16.99 [was $14.99, a 13.34% increase]
3 at a time (5 in-store exchanges per month): $19.99 [was $17.99, an 11.12% increase]
1 at a time (2 online rentals, 2 in-store exchanges per month): $7.99 [no change]

Blockbuster By Mail (no in-store exchanges):
1 at a time: $8.99 [no change]
2 at a time: $13.99 [no change]
3 at a time: $16.99 [no change]
1 at a time (2 online rentals per month): $3.99 [was $4.99, a 20.04% DECREASE]

Netflix has basically the same plans as Blockbuster By Mail except that they have a 4 at a time plan for $23.99 and their 2 movies a month plan is $4.99. At least some of Netflix's plans allow you to watch movies online.

I understand that Blockbuster has more costs than Netflix because of their physical stores. While this does affect their bottom line, it's also one of their biggest advantages. To have the 3-at-a-time-unlimited-in-store-exchanges go from $17.99 to $34.99 (almost double!) in the matter of months is simply ridiculous.

Does anyone like Netflix better than Blockbuster Online? Worse than Blockbuster Online? Has anyone heard of a way to easily transfer your queue from Blockbuster Online to Netflix?

For those who live near a Blockbuster and will now be paying $30 / month for Blockbuster Online, you may want to check your local store to see if they still offer the unlimited in-store rentals plan. Last I checked, it was right around $30 for 2 or 3 movies at a time. You can turn them around faster than by mail, if Blockbuster is convenient for you.