Blockbuster bows in-store sub service

New program allows unlimited rentals for $24.99 a month

Eager to exploit the popularity of subscription rental plans and reclaim business lost to DVD sales in mass-market outlets, vidtailer Blockbuster on Tuesday launched in-store monthly subscription service Movie Pass.

Service, available in more than 5,000 Blockbuster stores, allows customers to rent an unlimited number of DVD and VHS movies, two titles at a time, for $24.99 per month; for three movies at a time, it’s $29.99 a month. As with online rival Netflix — which charges $22 per month — there are no return dates and no late fees.

Once customers purchase the pass, their credit card or check card is automatically charged the monthly fee. Users still must return the discs to the store.

Blockbuster has said the renewable income stream from the subscription will compensate for the loss of lucrative late fees.

Company indicated, in an earlier subscription test-market program, that up to 15% of its members had no rental activity in the year before they signed on to the program, proving the service can boost revenues.

Blockbuster is due to be spun off from parent Viacom in July, and it has been working double time to roll out new initiatives in the movie and vidgame markets. Company already has a national subscription service for videogames, for which it charges $19.99 a month.

Blockbuster will add an online version of the movie subscription service later this year, to compete more directly with Netflix and the nascent WalMart online rental program.

The new Movie Pass will take the place of its test service, Freedom Pass, which was tried out in 25% of its U.S. stores.

Blockbuster shares gained 26¢ Tuesday to close at $15.37.

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