New releases to sell for $2.99 for first day
It didn’t take Charlie Ergen long to deploy a strategy that has made him a feared competitor in pay TV, announcing Friday that his newest business, vid chain Blockbuster, will offer thousands of movies for 99¢ a day and rent newer releases at the lower price of $2.99 for the first day.Long known for his aggressive pricing tactics to win new satellite customers, Ergen is playing the same game with Blockbuster, a subsid of Ergen satcaster Dish Network. It is clearly a move to compete head on with dollar-a-night kiosks like Redbox. Ergen surprised the media world back in April when Dish emerged as the winning bidder of a bankruptcy auction for Blockbuster with an offer of $320 million. Wall Street is still not completely clear on Ergen’s end strategy for the struggling retailer. It is also not clear how the pricing changes affect the formula for what the studios receive on the movie rentals. In making the announcement Friday, Blockbuster’s new prexy Michael Kelly said: “Our customers are seeking a better value — we’ve answered with new pricing and the flexibility of single-day rentals. Our new pricing gives our customers the best of both worlds: access to the latest releases — many 28 days before Netflix and Redbox — and the most movies at low prices.” On top of pricing changes, Blockbuster is offering a special promotion through July 4: When a customer rents a movie priced at $2.99, he can also rent another movie, which is priced at $1.99 or less, for free for a day. Once finished viewing the free film, customers can return to stores an unlimited number of times to pick up another $1.99 movie for free until Independence Day.