Blockbuster lowers pricing & runs promotions to lure in consumers

Blockbuster is still struggling to regain its past glory. After receiving a new lease on life via Dish Network’s $320 million buyout of the bankrupt company in April, the former movie rental leader now faces the same foes that helped it limp into Chapter 11 court last year – namely, Netflix and Redbox.

A new promotion aims to bring back lapsed customers with the promise of free rentals and lower prices. But is it enough?

“Rent one of our newest releases for $2.99 and enjoy unlimited movies priced $1.99 or less for free through July 4th,” the retailer announced at its official blog on Friday. Blockbuster is also switching to a lower by-the-day pricing structure, which some consider an attempt to better compete with successful rental kiosk company, Redbox.

Ditching the previous $4.99 multi-day fee for a two-tiered service, the company will now charge customers $2.99 to rent a new movie, and $1.99 for an older one. Both are subject to a 99 cents charge for each additional day.

It’s important to note, however, that Redbox still maintains the lowest price: $1 per night for DVDs, and $1.50 per night for Blu-ray discs. And with fewer and fewer actual Blockbuster locations open for business (with hundreds more likely on the chopping block in the months to come), the company falls well behind in another key aspect: convenience. Redbox boasts a massive 27,000 installed kiosks throughout America, while Blockbuster’s current store roster is below 2,000.

Store closures may be necessary for the company, but when combined with the vast number of Redbox kiosks there is understandable doubt that no promotion or price change will be enough.

Michael Kelly, Blockbuster’s newly-appointed president, said the deal was a way to deliver “better value” to consumers, adding that it offers “the best of both worlds” – a shot at the 28-day delay for some new films to hit Netflix and Redbox that Blockbuster stores don’t face.

Do you plan on taking advantage of this new promotion? Or have you washed your hands of rental stores altogether? Let us know in the comment section.