Yesterday I examined whether cable is necessary with the rise on television available online. We also have more options for renting movies than ever before. When I was growing up, we rented movies from the movie section of the local grocery store. Not long after, we got a specialized, movie rental only place called Super Video. Later Blockbuster entered the fray locally, followed by Hollywood Video and probably multiple others. It’s a business that’s been in a constant state of flux for a long time. The business model that Netflix brought to the table was a big change. At the time, Blockbuster seemed to have a stranglehold on the movie rental market – based on my perception.
Netflix, of course, introduced many people to the idea of renting movies by mail. The great thing about this program was the seemingly limitless availability of movies in terms of selection. You might go look for something in Brick and Mortar store and it may or may not be there – they may not carry it at all. Those stores have limited space to work with, and have to make decisions based on popularity in order to decide which movies to carry. If you were looking for some obscure title (like Willow), an online rental service might be your best bet. Of course, the nice thing about getting it at the store is that you have it immediately. You don’t have to wait for it, you don’t have to plan ahead for when or where you might want to watch a particular movie – if a debate breaks out about who was in a particular movie that you love, you could go rent that movie to end the debate and experience a hint of nostalgia at the same time.
Based on the success of the Netflix model, Blockbuster was forced to follow suit and enter into the online movie rental business. Redbox has pushed the envelope in a slightly different direction, offering movies out of what are essentially movie vending machines in lots of locations.
Both Netflix and Redbox have an advantage over Blockbuster in terms of their overhead cost, by virtue of the fact that they don’t have the significant cost associated with having a brick and mortar business establishment. They also avoid the significant costs associated with having a large in-store labor force. Because of that, one would assume that Redbox and Netflix might have some pricing advantages. So let’s go ahead and turn the discussion to price.
Redbox’s pricing is incredibly simple. With Redbox, you pay $1/night for a rental, and are allowed to keep it for as long as you want, although I think you can only get one out at a time. Free rental codes for Redbox movies are all over the internet. Lots of bargain hunter sites list the codes on their sites. Check out this post entitled, never pay for a Redbox Rental Again. The knock on Redbox is that they have a more limited movie selection than the online rental providers or even the brick and mortar style rental stores. Blockbuster has recently rolled out a similar program, charging $1/day for older releases and $2.50/day for new releases. Obviously, they’re losing the price war. This is understandable, as blockbuster has higher costs, but it doesn’t make me want to rent from Blockbuster, at least not under this deal.
Pricing gets slightly more complicated when you consider Netflix. Netflix offers one limited plan that allows you to get two movies a month (one at a time for as long as you want) for $4.99/month. They offer 3 unlimited plans with the cost depending on how many movies you want to keep out at a time; 1 for $8.99/month, 2 for $13.99/month or 3 for $16.99/month. If you were only going to get two movies a month and only wanted to keep them one day, Redbox is a couple dollars cheaper than Netflix, although the added selection that Netflix offers would have some value to me.
Blockbuster’s plan is complicated by the fact that they still have their stores, creating a lot of options. If you go with an online only plan, you can get, their prices are exactly the same as Netflix’s except their limited plan is $1 cheaper per month and their 3 movies at a time unlimited deal is $1 cheaper. Score one for Blockbuster. Of course, they seem to change their prices every 5 minutes (I’m a blockbuster subscriber). As a consumer, I don’t know how they can do business this way. Scratch that, I do know – it’s because most people are apathetic to small price changes. But I digress. Blockbuster also offers the ability to trade your movies in for others at their store. Of course this alters the price a bit. 1 movie at a time by mail + 2 in-store exchanges (per month) will run you $11.99, 2 movies at a time + 3 in store exchanges costs $16.99, and 3 movies at a time + 5 in-store exchanges costs $19.99.
The deal used to be that Blockbuster would ship your next movie as soon as you brought back the last movie they mailed you. They recently changed this so it doesn’t ship if you get an in-store movie. I think this makes the deal much worse, as it reduces the total amount of movies you can have in your possession at a time. Under the old structure, you could theoretically have 6 movies at once – 3 mailers and 3 from in-store trade ins. Now, no matter how you cut it, you have 3 all the time with the largest package.
Blockbuster has one more deal for the watch movies til your eyes bleed type watcher (you know who you are). You can get 1 at a time with unlimited store exchanges for $21.99, 2 at a time with unlimited for $29.99 or 3 at a time with unlimited for $34.99. You have to watch a lot of movies to make this worth it on a monthly basis. That’s 35 one night rentals from Redbox – per month. Try to get out a little more if you can;)
What’s the best? That depends on your individual movie-jonesing needs. I liked the flexibility of being able to trade movies in-store with Blockbuster, but under their new rules, I’m not so sure they’re adding enough value to make it worth it based on the price. We’ll have to re-evaluate that going forward. My wife and I have already talked about cancelling or changing our plan on several occassions. Our current agreement is to put a change on hold until we move. Moving has turned out to be a great excuse to procrastinate in lots of ways. As far as the next innovation in movie rental-dom, I think it’s almost upon us. People can already pay for movies on demand, but Netflix is reportedly developing a service where they offer a service with a wide array of titles on an on demand or download basis. Anyway, do you use one of these services? Have you used more than one? Do you have an opinion on which is the best? Is there something better that I don’t even know about yet? Please let me know in the comments. Thanks for reading.
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We use netflix. 2 at a time, unlimited, and we get our money’s worth.
When we started we also would receive the Blu-ray version of the DVD if it was available, this cost an extra $1/mo. Definitely worth it, most all new movies come to our house in blu-ray form.
About two wks ago they upped the blu-ray option to $3.
I almost cancelled, but it’s only two more dollars. If they do this a couple more times we’ll probably cancel, if it gets to around $20.