Hurt by competition with Netflix and other mail-order video rental services, Blockbuster's operating income threatens to stay flat this coming year. So the company in its wisdom has decided to eliminate its most-griped-about policy: late fees.

Instead of charging you an average $4 for the late return of a video, Blockbuster will now let you keep it an extra week, then charge your credit card for the purchase price. Oh, you didn't want to buy it? Well, you're in luck: you then have a 30-day "grace period" in which to return the video for a store credit, minus a $1.25 re-stocking fee. And just to clarify further: the grace period includes the extra week. So it's really only 21 days.

Is that clear? If you are regular customer at Blockbuster, you may be harboring some small doubt about waiting in line for the privilege of having some Tarantino wannabe explain the new fee structure to you.

For this is the real reason why people are switching to mail-order video: THEY NEVER HAVE TO GO TO THE VIDEO STORE!

Consider: You can order books by mail, too. But people flock to Borders and Barnes & Noble. Why? Because they're pleasant public places where people can buy coffee, sit and relax, browse in peace, even read. Quite apart from the debate over chains vs, independents, most people will agree that compared with the average Blockbuster, the average Borders treats its customers like human beings.

And this is true regardless of age or level of education. Compare the human specimens in Blockbuster with those in Borders, and you will find that they are basically the same. The only real difference is that the latter are happier. They aren't trying to choose a video, add up their late fees, or handle their children in an environment that assaults them with blaring promotional ads and mountains of candy, popcorn, and all the other unspeakable junk food that Blockbuster would have us believe is the normal, natural accompaniment to watching a film at home.

My point is simple. Instead of interpreting the difference between Blockbuster and Borders as proof of a McLuhanesque gap between noble print and debased electronic media, maybe we should think of it as the difference between a company that batters its customers into submission and one that understands that most people will actually pay for the privilege of feeling civilized..

December 15, 2004 11:00 AM |



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This page contains a single entry by Chris Mackie, Principal, Covelly Strategies published on December 15, 2004 11:00 AM.

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