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Sunday, January 13, 2008

My Blockbuster Total Access is still at $17.99

Am I the only person still paying $17.99 for my Blockbuster Total Access Plan?

I have had my BLOCKBUSTER account for quite some time -- ever since they introduced their $14.99 plan, switching (mistake?) from a charter Netflix member with a grandfathered "4-at-a-time" account a couple of years ago. Just for comparisons, mine is the Total Access Premium - $17.99 / month (plus taxes) - 3 at-a-time, unlimited mailings - unlimited in-store movie exchanges - 2 FREE bonus Movie or Game Rental E-Coupons / month.

Blockbuster Total Access options - the lowest is $19.99
I first read about it on Greg Hughes' blog back in December. (I subscribe to Greg's blog through Google Reader) Greg initially found out from an original email:

"To continue to bring you the unmatched convenience of both online and in-store DVD rentals, your monthly subscription fee will change from $24.99 to $34.99. This adjustment† will go into effect on your next billing cycle on or after December 27, 2007. The benefits of your subscription plan will remain the same."
It was further documented that my plan, the $17.99 plan was going to be increased to $19.99.

I did not get the email -- searched my gmail a few different times, but I still did not get it. While I was tempted to post about it immediately and celebrate my "victory" -- I thought it was too soon, and I wanted to wait until my next billing period before raising the flag.

Well, my billing on 01/07/2008 has come and gone -- I am still at the $17.99 rate. See a cleaned screenshot of my account status below. (Please note my usage -- will be discussed below):

Blockbuster Total Rewards account status at the $17.99 rate
Interestingly, if I go to 'change' account, I am only presented with the $19.99 package as my lowest cost option.

Blockbuster Total Access options - the lowest is $19.99
My conclusion? I have seen in suggested, but no confirmation in some of the articles that Blockbuster based this on usage. I believe that my experience is proof that they did.

Over the last few months (since August) I have traveled quite a bit in my role with Intuit. That meant that as you can see from the above account rental counts I do not -- and especially did not during that period -- rent a ton of movies. In fact, there may have been a month or two where I exchange zero DVDs by mail or in-store. I have never used the in-store exchange option and I only used my E-coupons once. Let's just say that I am not what many would call a heavy user of the service.

My suspicion is that Blockbuster ran usage statistics against their customer base and determined an area of cut-off of people that would be 'grand-fathered' due to a lower usage. Anyone above the line was increased, anyone below that cut-off was left alone for fear of either 1) they would definitely leave or 2) it would make them remember they have an account that would be cancelled.

So, what does this mean? It clearly means that Blockbuster selectively choose who they would 'give' the gift of price increases and who they would not. Seems a little questionable if you ask me for 'unlimited' services -- kind of like charging the guy who is 6'5" and 250lb more at the Fresh Choice buffet than you charge that 4'10" 85lb lady that comes in. What do you think?

In terms of an experiment, my usage is greatly increasing this month. I wonder what the chances are that I will get slapped with a price increase (and leave) next month? Either that or they see this post, it stirs up some trouble for them, and they increase me anyways. Stay tuned.


FredFredrickson said...

Seriously, I was slightly-grandfathered in, due to the fact that I'm a moderate user, but I buy TONS of snacks every time I go it. I'm now paying $19.99, which is better than my mom who's at $34 (well she was before she quit swearing off blockbuster for the remainder of her life). Problem is, I'm afraid of using my account to it's fullest, out of fear of the next price increase. It's definitely getting close to class-action law suit territory, if they periodically increase prices for all those who use their accounts as advertised.

Chris said...

How is this news? The fact that not all users would see a price increase was part of the original AP news release that went out Dec 21.
"Blockbuster Inc. (BBI) (BBI), which has been losing money on online movie orders, is boosting prices of its DVD-by-mail service for new customers and some existing ones by up to 40 percent...Blockbuster declined to say how many of its 3.1 million online subscribers are facing rate increases...Spokeswoman Karen Raskopf also declined to disclose which current customers will see price hikes other than saying,'We are taking into account the profitability of individual subscribers.'"

Ken Hanscom said...

It's news because it has widely been speculated that this pricing was based on usage, but there had been few (actually none that I could find) cases of people actually maintaining their current pricing program with the unlimited exchange features. That original press release was extremely vague.

Now having confirmed they are doing it brings more information publicly into some ways in which they may calculate profitability.

Thanks for the comment!