Blockbuster takes aim at rival Netflix in TV campaign
In a 30-second TV ad spot that launched Jan. 1 and names its rival Netflix Inc., Blockbuster Inc. seeks to up the ante in the movie DVD rental market by telling viewers that Blockbuster is the only DVD rental company that lets online subscribers return DVDs to a store. Since its Total Access service launched in November, Blockbuster has increased its number of online subscribers by 47% to 2.2 million from 1.5 million, the company says.
“We want the public to understand that Blockbuster has added new service dimensions with Total Access that are not available through online services,” says a spokesman for Blockbuster, No. 70 in the Internet Retailer Top 500 Guide to Retail Web Sites.
The TV ad, which mentions Netflix by name and shows its logo, has appeared during several broadcast football games, including the college football championship game last night, and will continue to appear on major network programs for an indefinite period, Blockbuster says. Admitting that the campaign gives publicity to its rival at a time when some consumers may still be learning about the availability of online rentals, Blockbuster says the ad targets consumers already familiar with online rentals to educate them about the advantages of the Total Access program.
Netflix declines to comment directly on Blockbuster’s advertising strategy or its Total Access program. “We’re aware of the ad campaign and are continuing to focus on our business model,” a spokesman for Netflix says. “People join Netflix in part because they don’t want to go to a DVD store.” Netflix, No. 21 in the Internet Retailer Top 500 Guide to Retail Web Sites, had more than 5.6 million subscribers as of the end of the third quarter. It has not yet released figures for year-end 2006.
Blockbuster’s TV campaign, developed by Southfield, MI-based Doner Advertising, is designed to convince consumers that visiting a DVD rental store brings value to an online rental service. Under the Total Access program, Blockbuster’s online subscribers can double the number of DVDs they have out at any one time at no extra charge. A subscriber who pays $17.99 per month to have up to three DVDs rented at any one time, for example, can either return the DVDs through the mail or bring them to any of more than 5,000 Blockbuster stores in the U.S. For every online-rented DVD returned to a store, the subscriber can receive one free rental from store stock in addition to the usual replacements from online inventory. So a subscriber who returns three online-rented DVDs to a store can receive six in return.
Blockbuster is also making its Total Access program available at no additional charge through its lower-cost subscription plans.
Total Access also is designed to expedite the time it takes to get DVD replacements through online inventory, the spokesman says. Once the online-rented DVDs are returned to a store, a clerk immediately enters the replacement order into the Blockbuster system—saving the subscriber the day or two that it would take to trigger a replacement when returning a DVD through the mail.
Reed Hastings, co-founder and CEO of Netflix, will deliver a keynote address at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose on the topic of The Transformation of the Movie Rental Industry.
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