Blockbuster Rewards
Blockbuster Rewards is an optional, paid membership program that began in 1999. For a yearly fee (usually $9.95 tax-free), members can obtain free rentals through their Rewards membership by the following means:
1. Once a month, customers receive a coupon for a non-New Release movie.
2. For every five paid rentals within one calendar month, the customer receives one New Release or video game rental free. When they rent five, they get one rental free (which may include New Release movies or games). Only two free rentals can be accumulated each calendar month using the rent five, get one method.
3.On Monday through Wednesday Blockbuster Rewards customers can receive a free non-new release movie rental for each paid rental.
Within Canada, the Blockbuster Rewards Membership is assembled slightly differently. For one, the monthly non-New Release movie coupon has been discontinued. The "Rent Five, Get One Free" promotion applies only to New Release and Video Game paid rentals, but there is no limit on how many one may accumulate within a calendar month.
The promotion where a customer can receive a free non-New Release movie with the paid rental of a New Release movie is only available to "Gold Rewards," and the window of opportunity is extended to Sunday through Thursday. The "Gold Rewards" membership is a free upgrade on the normal "Blue Rewards" membership, and is given to any Rewards customer accounts that accumulate 100 paid new release rentals within one year. If this volume of rentals is maintained, the annual fee is waived, and the customer continues to be a "Gold Rewards" member without having to renew.
The Rewards program is designed to provide a discount to high-volume customers, mostly those who watch the latest releases. Because the cost is relatively low (about the cost of two rentals) and its effective time is so long (one year), it also caters to those with sporadic rental patterns. Moreover, unlike the Movie Pass program or an online program, no credit card is required to purchase Rewards, so it can serve as a volume discount to those without credit cards.
Thursday, 19 July 2007
Business model
The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the cassette itself. It was Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, who personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point - customers either had to rent, wait, or buy the film on tape at the much higher MSRP price targeted at other rental chains and film enthusiasts, at that time then between $70-$100 before the end of the initial release period.
The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the cassette itself. It was Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, who personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point - customers either had to rent, wait, or buy the film on tape at the much higher MSRP price targeted at other rental chains and film enthusiasts, at that time then between $70-$100 before the end of the initial release period.
History
Blockbuster began in Dallas, Texas when it opened its first store on October 19, 1985. The founder of the company was 29-year-old David P. Cook. Cook grew the business and brought it public before handing the reins to CEO Joe Mitchell, who quickly grew it into a multi-billion dollar corporation. The company became a part of Viacom Inc. in 1994 at a price of $8.4 billion. During the 1990s Blockbuster bought out their major UK rival Ritz Video and changed the name of all the stores to their own, which made them the number one video rental store in the country by a wide margin.
In 1996, the Blockbuster Entertainment Corporation (as it was then known) was renamed Blockbuster, Inc. and the retail stores, Blockbuster. Older stores have not changed.
In 2002, Blockbuster acquired Movie Trading Company, a Dallas chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, they acquired Gamestation, a 64 store UK computer and console games retailer chain.
Blockbuster separated from Viacom in 2004 and launched Game Pass nationwide. Online DVD subscription was introduced on Blockbuster.com (aka Blockbuster Online). Blockbuster also rolled out its Game Rush store-in-store concept to approximately 450 domestic company-operated stores. Blockbuster began game and DVD trading in select US stores too. Overall, Blockbuster has lost significant amounts of money in recent years: $1.6 billion in 2002, almost $1.0 billion in 2003, and $1.2 billion in 2004.
As of February 2006, the company had a market value of under $500 million.
On July 2, 2007, the company named James W. Keyes (former president and CEO of 7-Eleven) as the new chairman and CEO. Keyes had worked at the convenience store chain for 21 years ubtil 2005, when it was sold to Seven & I Holdings Co. He replaced John F. Antioco who had been leading Blockbuster since 1997. Additionally, Blockbuster Inc. lifted the ban on using debit cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their debit card.
Blockbuster began in Dallas, Texas when it opened its first store on October 19, 1985. The founder of the company was 29-year-old David P. Cook. Cook grew the business and brought it public before handing the reins to CEO Joe Mitchell, who quickly grew it into a multi-billion dollar corporation. The company became a part of Viacom Inc. in 1994 at a price of $8.4 billion. During the 1990s Blockbuster bought out their major UK rival Ritz Video and changed the name of all the stores to their own, which made them the number one video rental store in the country by a wide margin.
In 1996, the Blockbuster Entertainment Corporation (as it was then known) was renamed Blockbuster, Inc. and the retail stores, Blockbuster. Older stores have not changed.
In 2002, Blockbuster acquired Movie Trading Company, a Dallas chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, they acquired Gamestation, a 64 store UK computer and console games retailer chain.
Blockbuster separated from Viacom in 2004 and launched Game Pass nationwide. Online DVD subscription was introduced on Blockbuster.com (aka Blockbuster Online). Blockbuster also rolled out its Game Rush store-in-store concept to approximately 450 domestic company-operated stores. Blockbuster began game and DVD trading in select US stores too. Overall, Blockbuster has lost significant amounts of money in recent years: $1.6 billion in 2002, almost $1.0 billion in 2003, and $1.2 billion in 2004.
As of February 2006, the company had a market value of under $500 million.
On July 2, 2007, the company named James W. Keyes (former president and CEO of 7-Eleven) as the new chairman and CEO. Keyes had worked at the convenience store chain for 21 years ubtil 2005, when it was sold to Seven & I Holdings Co. He replaced John F. Antioco who had been leading Blockbuster since 1997. Additionally, Blockbuster Inc. lifted the ban on using debit cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their debit card.
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