BLOCKBUSTER WILL DROP LATE CHARGES.Byline: Greg Hernandez Staff Writer In a seismic shift for the movie rental industry, the Blockbuster block·bust·er n. 1. Something, such as a film or book, that sustains widespread popularity and achieves enormous sales. 2. A high-explosive bomb used for demolition purposes. 3. chain announced Tuesday that it will do away with late fees for movies and games as it looks to keep or lure lure the skin-covered object which runs on a monorail on a Greyhound racing track and which the dogs are schooled to chase. The lure must be kept 30 to 40 ft ahead of the leading dog so that the field is stretched out. back dissatisfied dis·sat·is·fied adj. Feeling or exhibiting a lack of contentment or satisfaction. dis·sat  is·fied customers.
Dallas-based Blockbuster, the nation's largest video stores chain, will implement its new policy Jan. 1 at its more than 4,500 company-operated and participating franchised stores in the U.S. There is a catch: After a one-week grace period, customers will automatically be charged the price of buying the movie or game minus the rental fee. Customers can return the item within 30 days for a full credit to their account, minus a restocking fee of $1.25. ``Late fees have been an issue for a very long time in our business,'' Blockbuster chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. John Antioco said. ``Eliminating late fees is good for customers and, we believe, will be good for our company as well.'' Except to say there would be ``incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. adjustments,'' the chain did not specify how the new policy would affect its inventory since movies and games could now be out of stores for longer periods. The news caught customers at a Woodland Hills Blockbuster store on Ventura Boulevard Ventura Boulevard is one of the primary east-west thouroughfares in the San Fernando Valley; as it was originally a part of the El Camino Real (the trail between Spanish missions), Ventura Boulevard is the oldest route in the San Fernando Valley. It was also U.S. by surprise Tuesday. ``I think it's great for us,'' said Oscar Giron, a 21-year-old college student. ``I think it's going to get more customers for them because (late fees) were a big problem for me, and that's why I wasn't going to Blockbuster as much.'' Earlier this year, Giron said his sister misplaced mis·place tr.v. mis·placed, mis·plac·ing, mis·plac·es 1. a. To put into a wrong place: misplace punctuation in a sentence. b. a rented DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. of the film ``Blade 2,'' and he had to pay $50 in penalties, only to have the movie turn up a month later. ``After that I just started buying them or getting them off the computer,'' Giron said. Video rental activity began to decline dramatically during the first half of 2004, with an increasing number of consumers buying titles instead of renting. The competitive threats come from discount stores, supermarkets, bookstores, convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. and online services that often sell DVDs at heavily reduced prices. Blockbuster executives said retail DVD sales have by far had the largest negative impact on the traditional store-based rental business and, to a lesser extent, so have online rental services such as Netflix Inc. Cable, satellite and computer downloads also compete for consumers. ``The gloves are off in the rental business,'' said Brad Hackley, vice president of business development for Rentrak's Home Video Essentials. ``I think right now we are witnessing a dramatic shift in home video.'' Blockbuster, Hollywood Video and Wal-Mart are among the companies that have recently launched either in-store or online rental programs that allow consumers to pay a monthly fee for unlimited rentals with no due dates. The programs and prices vary at each chain. Over the past year, Blockbuster has tested a variety of rental options in markets across the U.S. The no-late-fees tests resulted in higher rental activity and retail sales. The company said this offset the lower level of revenues resulting from eliminating late fees. ``Customers' perception of Blockbuster improved without late fees,'' Antioco said. ``Certainly, not surprisingly, our employees are happier with the elimination of late fees. It eliminated for them those unpleasant conversations with customers at the register about late fees they owed us.'' The chain estimates that it will lose $250 million to $300 million in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in fiscal 2005 that would have been generated by late fees. As with the test programs, they expect to offset the loss with added revenues from an increase in store traffic as well as a decrease in promotional and marketing costs. The company estimates that marketing and implementation costs for the no rental fee launch will be approximately $50 million. The chain will also reduce capital expenditures such as new store openings and store remodels by approximately $100 million in 2005 compared with the current fiscal year. Hackley, whose company tracks movie rental activity, said Blockbuster's announcement is not a white flag, but a move that will be good for the overall health of the industry. ``The rental market is far from being played out,'' Hackley said. ``I think the online segment is going to explode (1) To break down an assembly into its component pieces. Contrast with implode. (2) To decompress data back to its original form. next year. I think what Blockbuster is doing is a very strategic move. They are taking the business model of online models and applying them online and in-store.'' Blockbuster shares rose 40 cents, or 4.6 percent, to close at $9.20 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . That is near the lower end of their 52-week trading range Trading Range The spread between the high and low prices traded during a period of time. Notes: When a stock breaks through or falls below its trading range after several days of trading in a range, it usually means there is momentum (positive or negative) building. of $6.50 to $19.37. Greg Hernandez, (818) 713-3758 greg.hernandez(at)dailynews.com |
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