Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Blockbuster Tries to Regain Luster


Blockbuster is trying to make a comeback into your living room.

The movie and game retailer, which filed for Chapter 11 bankruptcy last September, wants to lure potential customers back into its stores by lowering DVD rental prices and offering new deals. Satellite TV provider DISH Network bought the troubled company earlier this year and has been trying to turn it around.

The latest gimmick: Free movies. Blockbuster has been mailing out flyers to advertise its new unlimited free-movies promotion through July fourth.

The offer sounds too good to be true, right? You decide.

Here's how it works:

You drive down to the nearest Blockbuster. (It could be far. Hundreds have closed over the past couple of years. Make sure you have gas.)

Find a movie to rent for $2.99. Then, select a movie which costs $1.99 or less. That will be your free movie. Go home. Find time to watch the free movie and return it within 24 hours. You've now also apparently earned the right to rent more $1.99 or less movies for free until Independence Day.

Stacey Widlitz, an independent analyst, retail consultant and CNBC Contributor, does not think the promotion will work because there's too much pressure on the consumer to return the movie on time.

"It seems like a hassle when you can get catalog titles at Neflix for a monthly flat fee at your leisure with no consequences," said Widlitz. "With the convenience of Netflix and on-demand movie channels, do you think busy Americans will think it's worth their time to make several trips to Blockbuster to return movies?"

Blockbuster, which does offer a movie, TV and game mail-in rental service, has been reeling from a change in technology and from competitors such as Netflix and Redbox.

"Bottom line is Blockbuster ended late fees years back which represented a huge portion of profits. That squeezed potential profits at a time when Blockbuster was too slow moving to an online model. That is a direction the customer went and Blockbuster was simply left behind," added Widlitz.

For those who like to walk down memory lane, maybe this deal is for you. Curl up with a movie, your jiffy pop and a can of Tab—just like it's 1989.

Stephanie is Squawk Box producer. Follow her on twitter @StephLandsman

Questions? Comments? Email us at

Follow NetNet on Twitter @

Facebook us @