Blockbuster looks to bag online video rental market share by cutting fees

Blockbuster Inc. is trying to slice off a bigger chunk of the online video rental market by offering rates as low as $4.99 a month to current and new subscribers to Blockbuster’s By Mail online rental service. Shoppers can test the new program for two weeks at no charge.

“The online rental market is projected to increase 43% during 2007 and through Blockbuster Total Access and now Blockbuster By Mail, we intend to capture our share of that growth, broaden our customer base and remain the fastest growing online rental service in the marketplace,” says Shane Evangelist, senior vice president and general manager of Blockbuster Online.

Total Access is Blockbuster’s answer to market leader Netflix Inc.’s mail-based movie rental model, with a storefront twist. Total Access subscribers have the option of returning their online rental DVDs by mail or exchanging them at one of more than 5,000 participating Blockbuster stores for free in-store movie rentals.

Through Blockbuster By Mail, subscribers can return online rentals by mail or by dropping them off at a participating store. Following the in-store video return path will trigger the shipping process for the next movies customers have on their rental list, which could shave one day off the mail-based procedure, Blockbuster says. By Mail subscription plans start at $4.99 per month for one DVD at a time and a maximum of two per month, up to $20.99 for 4 DVDs at a time for an unlimited length of time.

Movies returned to a store can’t be exchanged for the free in-store movie rentals available to Total Access subscribers, but By Mail subscribers will receive a coupon for one free in-store movie or game rental per month. In-store movies and games rented still are subject to store rental terms, including due dates, and must be returned to the store from which they were rented.

Consumers can test either video rental program for free by visiting Blockbuster.com and enrolling in a two-week trial. Blockbuster is No. 51 in the Internet Retailer Top 500 Guide.