Sorry, Blockbuster, it Doesn't Sound Like You're Rescuing Netflix Customers to Me

It isn't easy being Blockbuster. When the company's in the news, the news is usually lousy-like in September of last year, when the once-mighty video rental chain went bankrupt.

This, however, has been a good week for Blockbuster. Sort of. At least if you assume that a bad week for Netflix is automatically a good one for Blockbuster.

Blockbuster seems to think so. After Netflix ticked off customers by raising the cost of subscribing to plans that include both streaming and DVDs-by-mail, Blockbuster issued a press release which it titled "Blockbuster Rescues Furious Netflix Customers." Oozing schadenfreude, it quoted Blockbuster's president saying that Netflix's price hikes were "shocking" and pointed out some advantages of Blockbuster over Netflix, including Blu-Ray rentals at no extra cost, the availability of game rentals, the ability to return discs to a brick-and-mortar Blockbuster location, and no 28-day delay before new titles arrive.

It also offered a special deal to defecting Netflix customers: a 30-day free trial of Blockbuster's Total Access DVDs-by-mail service, and then a one-disc plan for $9.99 a month or a 2-disc plan for $14.99 a month.

It's nice -- or at least opportunistic -- of Blockbuster to offer the price break. But the thing is, it's unclear to me why switching would turn an unhappy Netflix customer into a happy Blockbuster one:

The special offer doesn't save unhappy Netflix customers any dough. It doesn't undercut Netflix's pricing -- it just matches it.

If you don't have a Blu-Ray player, Netflix is cheaper than Blockbuster. You can get a DVD-only 1-disc plan for $7.99 a month, or a 2-disc plan for $11.99.

Without the special offer -- which expires on September 15 -- Blockbuster is more expensive than Netflix. It may be wringing its corporate hands over Netflix's pricing, but it normally charges more than Netflix does -- $16.99 a month, for instance, for something akin to what Netflix charges $14.99 for. (To give Blockbuster credit once again where credit is due, the extra $2 does get you some movies earlier than Netflix has them, plus game rentals and the ability to do business at a neighborhood Blockbuster location, assuming you still have one.)

Blockbuster doesn't have anything that compares to Netflix Watch Instantly. Netflix actually lowered its prices for DVD-only customers: there's now a $7.99 one-disc plan ($2 less than Blockbuster's lowest offering). What it did was raise the price of getting DVDs and all-you-can watch streaming video. But Blockbuster has no unlimited video service, just rentals and purchases, and there's no bundled plan that includes DVDs and on-demand. So part of being "rescued" by Blockbuster involves giving up one of Netflix's principal attractions.

To recap: If you're a Netflix customer who's disgruntled because Netflix has raised the cost for folks who want both DVDs and unlimited streaming, being "rescued" by Blockbuster won't save you money, and will require you to give up unlimited streaming. How many Netflix malcontents are going to go for that, once they're done letting off a little steam?

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