"IMPORTANT: Your DVD Shipments Have Likely Been Delayed

We're sorry to report that since Tuesday we've been experiencing issues with our shipping system, so many of you have not received DVDs in a timely manner and many of you have not received emails letting you know we got a DVD back from you.
We pride ourselves in delighting you, and we've let you down. We apologize and are working around the clock to restore normal operations. To all of you whose shipments have been delayed, we'll be automatically applying a credit to your next billing statement. Or, if you are new to Netflix and your first shipments have been delayed, we recognize that this is not a good way to begin your Netflix membership and we'll automatically extend your free trial.
Our goal is to ship DVDs as soon as possible and to keep you updated. Again, we are sorry for the inconvenience we've caused you and thank you for your patience.
The Netflix Team"

I actually didn't even notice that my Netflix had been delayed until checking the website, but I appreciate that they are straightforward about the issue. -Kristin

Unlike the J. Crew "We've made some mistakes..." notice, Netflix here acknowledges the cause of the problem, that the company is working to fix it, and offers customers compensation. -Brent

I'm HAPPY about how well the service provider is handling the outage, mostly because other service providers handle things like this SO poorly. -Steve

While my personal experience hasn't been affected by this shipping delay, I am still pleased by their efforts to publicly own up to an error. Not to mention their effort to smooth things over for anyone bothered by the hiccup. I have always been pleased with Netflix and their customer service, and this is just another instance that tells me I've chosen to give my business to a great company. -Annie

1- they admit they messed up (I hadn't even noticed)
2- they said they were sorry
3- they will be crediting me for the error

I'm left happy, even if I need to wait an extra day or two for the new Harold and Kumar movie. -B.

If something did happen, I haven't noticed. Thank you once again Netflix for rising above my expectations. You quickly own up to a problem and provide the appropriate compensation without making me get into a verbal fist fight with a CSR. -Eric

Way to go, Netflix. Now fix your site!

(Photo: corsec67 )

Here's their official statement:

"Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City," said Jim Keyes, Blockbuster Chairman and CEO. "We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand. We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."

Whatever Circuit City's got, Blockbuster doesn't want to catch it.

Blockbuster Withdraws Proposal To Acquire Circuit City [Blockbuster]
(Photo: Maulleigh )

The Associated Press says:

The design, which [CEO] Keyes said is likely to change with testing, offers a range of features to help customers make movie choices, including previews and recommendations. Keyes said the company is working to reduce the download time for movies to about 30 seconds.

At first the system will only be compatible with the an Archos portable device, but will eventually be an "open system," able to recognize a wide variety of devices. Blockbuster says that even if they don't manage to acquire Circuit City, "transforming" their stores with these movie ATMs is their goal.

"With or without Circuit City's acquisition, we think we have a terrific opportunity to transform our stores," Keyes said. Blockbusters' presentation also included mock-ups of small movie download kiosks for other locations such as airports.

Will a digital download kiosk save Blockbuster? Or are you perfectly content with Netflix and their new box?

Blockbuster unveils in-store kiosk prototype [AP]
Blockbuster Annual Meeting Presentation [Blockbuster]

From IFC/Blockbuster's press release:

Under the terms of the agreement, IFC and Blockbuster will share rental revenues from IFC titles. Blockbuster will have an exclusive 60-day rental window, including both the physical and digital rental distribution channels, for each title as it becomes available. During this period no title will be available on a retail basis in any format. After the 60-day period, the IFC titles will be available on a non-exclusive basis both for retail and digital distribution. However, Blockbuster will retain the exclusive physical rental distribution rights for IFC titles for three years after each street date.

Considering Blockbusters' draconian NC-17 policy, the retailer seems like an odd choice for IFC, says Emerson:

If you were to check into the availability of films on DVD at Blockbuster Online, among the titles you will not find are "Crash" (David Cronenberg,1997), "Beyond the Valley of the Dolls" (Russ Meyer, 1970 — screenplay by Roger Ebert), or "This Film Is Not Yet Rated" (Kirby Dick, 2006), an IFC Films release. They're not even listed, because they were rated NC-17 and Blockbuster will not make such films available through their stores or online service. (See David Edelstein's article, "Blame Blockbuster, not the MPAA.)

You will also not find the theatrical releases of Ang Lee's "Lust, Caution," Takeshi Miike's "Audition," John Waters' "A Dirty Shame," Peter Jackson's "Dead-Alive," Bernardo Bertolucci's "The Dreamers," Abel Ferrara's "The Bad Lieutenant" and many other films that are only available in cut versions (in some cases heavily cut versions) that have been re-submitted to the MPAA for an R rating just so they could make it onto Blockbuster's shelves during their first few months of release. You tell me if 2001's "L.I.E.," directed by Michael Cuesta ("Six Feet Under," "Dexter"), starring Paul Dano and Brian Cox, is available from Blockbuster Online. There's no box art, no description, no credits info, but there's a page for it here.

Does IFC think its core audience doesn't care about the integrity (or lack thereof) with which a company like Blockbuster treats the movies it rents and sells? I mean, if they don't, who does? You'd think the core IFC constituency would be precisely the "movie consumers" who, in principle, would not patronize a place like Blockbuster, any more than they would order a Domino's pizza.

"We're delighted to join with BLOCKBUSTER as we continue our mission of making independent film available to the widest possible audience," said Lisa Schwartz, IFC's senior vice president of sales and business development.

Is Blockbuster trying to start a Netflix/Blockbuster format war?

IFC signs pact with devil Blockbuster [Scanners Blog]
IFC Entertainment and BLOCKBUSTER Sign Two-Year Exclusive Rental Deal (Press Release) [Yahoo!]
(Photo:medialian1)

I am writing to explain why I am no longer a Blockbuster Total Access subscriber and never will be again. Service wasn't always so deplorable at Blockbuster, but in the last several months I have had three very negative experiences with the chain that has caused me to turn from a Blockbuster evangelist, who persuaded my parents and friends to join the Total Access plan, to a disgruntled consumer who won't step into a Blockbuster until they've reformed their customer service attitude.

Keep in mind, I was an easy customer. I auto-paid my monthly bill. I held my movies for weeks and months on end without mailing them back or taking them back to the store for exchanges. I even went for a period of 6.5 months without exchanging my movies (While being charged $17.99 all the while). In the past year I was with Blockbuster, I exchanged only 11 movies in-store. I was as profitable as they could get. But between August and today, I have had three incidences which have convinced me that Blockbuster managers are (1)Incompetent (2)Powerless and (3)Apathetic.

Incident 1: I had exchanged out a set of 3 movies in-store in August. After keeping them out past their initial due date I was billed the price of the movies which is in-line with their policy. As long as they are returned within 30 days, Blockbuster is supposed to refund the charge minus a $1.25 processing fee. However, I got called out-of-town on a business trip, and I left before being able to return the movies. Once I realized the situation, I called my local store and asked if it was necessary to have my wife return the movies while I was gone, or if I could wait a week and return them myself. His answer was that it wouldn't be a problem for me to return the movies after 30 days, but I would be charged the $1.25 fee per movie. Great, I thought, until I got back home. When I tried to return the movies (32 days past their due date), I was told that it was impossible to return the movies, and that I'd have to pay the ridiculously marked-up used price of $40 for the three (the price at Target for all three new was $21). The manager simply wouldn't acknowledge that one of their employees had mis-informed me about my ability to return the movies. I tried to call their corporate customer service, who could only refer me to the district manager. To cut this long story short, I spent 3 weeks calling between the store manager and district manager trying to simply refund the movies, which they still sold on their Used racks. I was repeatedly told it was "Impossible" and "the computer won't allow it". I know the time I spent trying to return the movies was worth more than $40, but I felt like I was being wronged, and didn't want to let the issue go. I finally caved when I received a threatening Credit Agency letter. I thought about writing this letter to The Consumerist back then, but I figured it was partially my fault, even though I thought Blockbuster did a terrible Customer Service job.

Incident 2: This one was much shorter. Me, my wife, and her friend walking into a Blockbuster with three return envelopes to exchange. My wife, who had never exchanged movies before, didn't know to hold onto the envelopes until checkout and sat them on top of the counter as she walked in (thinking that she wasn't allowed to walk around the store with them). About two minutes later, I realized she wasn't holding them any longer and walked back to the counter to pick them up. Too late. The clerk had already checked them in without pausing even for a second to see if someone was planning to use them. Again, the clerk and manager claimed that they were powerless slaves to the computer and wouldn't be unable to let us use the credit towards any new movies since they were already checked-in. Still sore after the treatment I had received a month earlier, I didn't want to let this go, but they wouldn't budge. I explained that I was a long-term customer who rarely redeemed my credits, but they stood firm. We ended up paying for two movies and left.

Incident 3: Today. I tightly clutched my return envelopes as I slowly browsed the shelves for three new movies to exchange. Finally, I settle on two movies and a Wii game. Last year, I was able to use a return envelope to pick-up a Wii game without a problem. Well apparently things have now changed. After scanning my three envelopes, they scanned the three items I had brought up. $5.34. "Excuse me, this should be an even exchange." Apparently not. Now the returned movie only counts as $4 off a $9 game rental. Oh well, I thought, "Just take it off and I'll grab another movie". Nope - Apparently each credit gets automatically applied to a specific item and can't be re-transfered to another item. On top of that, they wouldn't remove the game from my checkout and insisted that I HAD to pay for the game, even though I hadn't payed yet and the transaction was unfinished. They insisted that the transaction WAS finished and now I had to pay for it (Which doesn't make any sense. How can the transaction be over before I am even told what the cost will be). After much debate with the manager, they agreed to take the game off the transaction (as a "Favor"), but they couldn't do anything about applying the credit to another movie. By this time I had already decided that I would be writing this letter when I got home, and canceling my year-long subscription to Blockbuster Total Access.

It no longer surprises me that Blockbuster is failing as a company. They are closing many stores and hemorrhaging cash. Many analysts don't even expect them to survive more than a few years. They may not be able to compete with the price and selection of Netflix or the new Apple video rentals, but they had one thing strongly going for them - availability. I knew that if I really needed to, I could go down the street and pick up a physical movie and talk to a real person if I needed to. Now my mindset has changed. Clearly, Blockbuster has decided that their employees and even managers are too incompetent to run their own stores and must be treated like trained monkeys. Even when I found a sympathetic ear, they were simply powerless to over-ride the computer for even simple tasks. Oh well, now that Netflix has unlimited downloads at less than half of the price I was paying at Blockbuster, maybe this is exactly the incentive I needed to make the change.

Should he switch?

(Photo:medalian1)

Looks like in addition to bad service Blockbuster wants another 2 bucks per customer who were grandfathered in by the old pricing system.

I Kinda thought it was too good to last, guess I was right.

Hi *******,

As a BLOCKBUSTER Total Access™ subscriber, it's always easy to have the right movie during this holiday season with more than 75,000 titles, including great new releases like Harry Potter and the Order of the Phoenix, The Bourne Ultimatum and Pirates of the Caribbean: At World's End.

We know that during this busy time of year the convenience of BLOCKBUSTER Total Access is especially important to you. Have your movies delivered right to your door. If you want new movies right away, exchange in-store*. And with free shipping both ways and no late fees, it's easy to enjoy all the movies you want for as long as you want.

To continue to bring you the unmatched convenience of both online and in-store DVD rentals, your monthly subscription fee will change slightly from $17.99 to $19.99. This adjustment† will go into effect on your next billing cycle on or after December 27, 2007. The benefits of your subscription plan will remain the same...and it's a value of $34.99!

And now check out blockbuster.com where you can view exclusive footage from The Great Debaters, the much anticipated new movie starring Denzel Washington that opens in theaters on Christmas Day. This is just another example of how BLOCKBUSTER® is working to bring you exciting new entertainment features.

There are plenty of long winter nights ahead, so make sure that your Queue is filled with all the movies you want to watch next including new movie releases coming in January 2008, such as 3:10 to Yuma, The Game Plan and Saw IV.

Thanks for continuing to be a BLOCKBUSTER Total Access subscriber. It truly is the best entertainment value out there.

BLOCKBUSTER

I have been using Blockbuster Online for almost a year now. It has been ups and downs. I have been shipped the wrong movie countless times, but just took the pain of not being able to watch my movie and sent it back. I have received enough "wrong" movies to deserve a few months of free service, but I don't even complain I just figure "Nature of the Business".

Now to my issue.... I had rented the classic "Apocalypse Now" and watched Disc One (which by the way Blockbuster online doesn't tell you it is 2 discs on some of the choices so it is hit or miss.). So I went to my queue to put disc 2 on the list so I can enjoy the end of the movie. To my dismay, I log in to my account to find my queue EMPTY. I had 20-30 movies in the queue.... all gone!

So I email Blockbuster asking what happened to my movies? and can they do anything to recover the list! This is when the Mania ensues.... The respondent from Blockbuster was rude at best. Won't acknowledge I even have a problem. Basically accuses me of erasing all of my movies (why would someone do that?) or that I gave my password to someone else and they did it. The most scathing part is that in her first response she in so many words "scolds" me for having an empty queue! I am also a big fan of the "Always here to help" signature on the end of the emails....

It is a ridiculous response, and considering their situation they should be doing jumping jacks to keep customers. Instead they respond with nonsense. They sent me two "surveys" after each response which I filled out "Extremely Dissatisfied" on every question.

Here is a copy of the Emails for your reading enjoyment. Hopefully people reading this will choose to not use Blockbuster, or even better someone from Blockbuster will read this and go to the customer service office and rattle some cages of their customer service agents.

My first email:
"All the movies I had in my queue are gone? What happened can I get the list back?"

Blockbusters Response:
"Hello Martin,

Thanks for contacting BLOCKBUSTER Online Customer Care.

I've checked that your queue is empty. Unfortunately, we would not be able to recover the list of movies that you have. You may just try to add movies again. Please remember that we use your queue to provide service and ask that you keep 30-40 "Available" movies listed at all times to ensure there are no interruptions.

Always here to help,

Regina
Customer Care Associate
BLOCKBUSTER Online"

My Response:

"Regina,

That isn't a good answer.

1. What happened to everything I had in there? Where did they go?
2. I don't like the attitude of your response. You basically scolded me for not having 30-40 movies available. I DID have movies in there, the complete list is GONE.
3. If you can't recover my list, I want SEVERAL months credit to my account. There was months of picking movies in there. I will never be able to remember all the movies my Wife and I put in there.

Please provide a better response. Your response was sub-par at best.
Marty"

Blockbuster 2nd Response:

"Hello Marty,

Please note that your queue can only be accessed with your own personal password. We don't have the ability to modify or manage titles to your queue. You are also solely responsible for all activities that occur on your account or through use of your password by yourself or by other persons. Please make sure that your password is secured so no one can add or delete a movie in your queue without your knowledge. Thanks for your understanding.

Always here to help,

Regina
Customer Care Associate
BLOCKBUSTER Online"

My 3rd Response:

Regina,

Can you please give this to a manager? You are not even answering my questions!

I did NOT delete anything from my queue, and I am the ONLY person with the password. Why would I delete my movies that a spent months putting the list together.

Please give this to someone who can give me a real answer. Otherwise I will have to cancel and go to Netflix. This is ridiculous that you aren't taking me seriously. I didn't delete anything and now after 2 communications from you... I still have not even gotten as little as and APOLOGY.

Regards,
Marty

Our advice? Netflix? The local library?

(Photo:Maulleigh)

Blockbuster managed to lose $35 million in the third quarter, and its customers have been writing in to complain about benefits being cut from their "Total Access" packages.

Not good.

From Forbes:

Chairman Jim Keyes announced that Blockbuster will reduce the number of people currently employed by the company in an effort to reduce annualized overhead costs by approximately $45 million.

As if any more proof was need that Blockbuster Total Access program essentially failed to compete effectively against Netflix (nasdaq: NFLX - news - people ), Keyes noted that "the company will no longer be narrowly focused on its online subscriber count but instead will concentrate on the growth of, and report on, its total membership."

"Rights management" software would allow the movie to be played on either an iPod or iPhone for the duration of the rental period. CNNMoney points out that Video On Demand has proved lucrative for cable and satellite providers—and none of them have as many customers as Apple.

That being said, we've never really understood the desire to watch a whole movie on an iPod. To each his own, we guess.

iTunes movie rentals? Maybe soon [CNNMoney]
(Photo:Earth2Kim)

From the New York Times:

The Hillsboro operation, which occupies about 30,000 square feet of a low building in an office park, is intended to keep the red envelopes coming. Michael Osier, vice president for information technology operations and customer service, said he rejected cities like Phoenix, Salt Lake City and Las Vegas, which are known as call-center capitals, because of their high employee turnover rates. He settled on the greater Portland area because of the genial attitude on the part of most service workers.

"In hotels and coffee shops and the airport, it's amazing how consistent people are in their politeness and empathy," said Mr. Osier, who is based at Netflix headquarters in Los Gatos, Calif. "There's an operational language in the industry that people are so jaded about — phrases like 'due to high caller volume.' We're very consciously trying to counter that mentality."

Netflix's decision to eliminate the e-mail feature was made after a great deal of research, Mr. Osier said. He looked at two other companies with reputations for superb phone-based customer service, Southwest Airlines and American Express, and saw that customers preferred human interaction over e-mail messages. "My assessment was that a world-class e-mail program was still going to be consistently lower in quality and effectiveness than a phone program," he said.

When Mr. Osier presented his findings in January to fellow executives, Reed Hastings, the Netflix chief executive, sent an enthusiastic message, BlackBerry to BlackBerry, from across the room. Mr. Hastings quickly became a supporter of the e-mail elimination project.

The company has tried to give the service representatives more discretion in deciding when to assuage disgruntled callers with bonus discs and account credits — and they are allowed to err on the side of generosity. More often than not, a month's credit will be issued or a missing disc marked simply as lost, and the customer will not be charged. Netflix places no particular requirements on call duration, preferring that customer service representatives take the time they need to keep a customer happy and loyal.

In contrast, Blockbuster outsources a portion of its customer service, and when people do call, they are encouraged to use the Web site instead. Its call center is open only during business hours, said Shane Evangelist, senior vice president and general manager for Blockbuster Online, because the majority of customers prefer e-mail support, which is available 24 hours a day. "Our online customers are comfortable using e-mail to communicate," he said.

We'll just say: "Yay."

Netflix Lowers Prices for DVD Rentals by $1 ... Again [Gizmodo]

PREVIOUSLY: Netflix Sticks It To Blockbuster, Cuts Prices Again

Blockbuster buys download service [Mercury News]
(Photo: Magic Lantern Shows)

Reader Melissa writes:

This email arrived in my inbox at 1:23am on July 27th letting me know that Blockbuster is changing their subscription plans. Don't worry they say, because this won't change my current pricing, but any change after July 26th will result in the new price structure. Nice timing there eh?

Whoops! Guess they "accidentally" sent out the email a bit too late.

Blockbuster writes (to Melissa):

Dear Melissa,

We want to let you know about some changes to our BLOCKBUSTER Total Access subscription plans. This information is provided for your reference only - your subscription plan will not be affected by these changes.

Beginning July 26, 2007, there will be a price increase on your current unlimited plan. We will also begin to offer plans which limit the number of in-store exchanges available each month.

As a preferred customer, your plan will not change at this time. Please continue to enjoy your exclusive subscription plan, including no monthly limit on free* movie rentals or discounted game rentals when you exchange in-store, at today's price - far below the published rate available to new subscribers.

At any point, you can log in and review your current subscription plan or see all available plans. Keep in mind that if you want to change your subscription plan at any point after July 26, 2007, your new plan will be subject to prices and terms available at that time.

Please don't hesitate to contact us if you have any questions or concerns.

Sincerely,
Your Friends at BLOCKBUSTER

PREVIOUSLY: Netflix Sticks It To Blockbuster, Cuts Prices Again

Stepping up its attack on Netflix also has been hurting Blockbuster, which has had to spend more heavily on DVDs to ensure sure its stores have enough discs to keep up with the additional demand from its roughly 3 million online subscribers. The company lost $49 million in the first quarter.

Blockbuster may not be willing to endure those kinds of losses much longer, especially with the recent hiring of a new CEO, James Keyes. In a Securities and Exchange Commission filing last month, Blockbuster said it will modify its online service "to strike the appropriate balance between continued subscriber growth and enhanced profitability."

Netflix to lower online DVD rental fees in battle with Blockbuster [Chicago Tribune]
PREVIOUSLY: Netflix Lowers Costs As Blockbuster Prepares To Raise Prices
(Photo: Pascal Vuylsteker)

The company said in the filing that it planned to modify its popular Total Access plan before the end of the year to "strike the appropriate balance between continued subscriber growth and enhanced profitability."

Dear Customer:

Great news! We're lowering the price on our 2 DVDs out at-a-time plan to $13.99 a month plus applicable taxes. Now you can enjoy Netflix for less!

You don't need to do a thing - except pay less. Your membership will automatically move to the lower price and be reflected in your Membership Terms and Details. The lower price will take effect beginning with your statement on or after June 28, 2007.

Membership Terms and Details:

Your $13.99 plan gives you 2 DVDs out at-a-time and you can also watch 14 hours of movies and TV episodes instantly on your PC each month - for no additional charge.

Enjoy!
Your friends at Netflix

Blockbuster Settles Fight With Netflix [NYT]
PREVIOUSLY:Blockbuster To Close 282 Stores
Blockbuster Weighing Charge For Total Access
(Photo: swruler9284)