Blockbuster slashes prices for rental plan

Movie Pass fee 'busted

NEW YORK — In another dramatic change to its business model, Blockbuster said Thursday it is slashing its in-store “all you can watch” plan from $24.99 to $14.99 a month.

The discounted Movie Pass price matches Blockbuster’s recently reduced online monthly plan, which took on popular Internet vidtailer Netflix.

Blockbuster also said it is introducing Game Pass, essentially the same program for vidgames. Introductory offer for Movie Pass and Game Pass is $9.95 for the first month.

The plans don’t come without disclaimers. While in-store Movie Pass holders can rent unlimited movies, they can rent only one per visit. Online customers can rent three movies at once, as well as receive two free in-store rentals good for movies or games.

“Blockbuster is the only company that lets customers choose to rent their movies at the store or through the mail,” said Blockbuster exec VP and prexy of U.S. store operations Nick Shepherd. “This latest offer is another example of our commitment to becoming the complete source for home entertainment, and serves as a signal of our ultimate goal to integrate the company’s in-store and online rental operations.”

Move comes just two months after Blockbuster announced it was eliminating late fees. Now customers are given an extra week by which to return a movie or vidgame rental. If the item isn’t returned, customers are charged the going price of the rental.

Subscription biz model?

As a result of the various changes, Blockbuster — the country’s largest video rental chain — is looking like it’s shifting to a subscription biz model.

Wall Street analysts said it didn’t make sense for Blockbuster to charge one monthly price for online movie orders and another for retail locations. The disparity in pricing could actually cannibalize in-store traffic.

Blockbuster, the country’s largest video rental chain, continues to pursue a hostile takeover bid for nearest rival Hollywood Entertainment.

Some Wall Streeters questioned the impact of Blockbuster’s various price cuts to the company’s bottom line, saying the vidtailer could take a short-term hit.

Lehman Bros. Entertainment Equity analyst Anthony DiClemente wrote in a report Thursday that the $14.99 plan could cost the company $170 million-$175 million in revenues on an annual basis.

Blockbuster shares were down 15¢ in trading Thursday to close at $8.75.

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