The Dish on Blockbuster Online Under Dish Network

When Blockbuster first got into the DVD-by-mail business in 2004, the service was largely a joke for the first several months. Blockbuster Online would ship incorrect DVDs, takes days to ship DVDs, etc. Blockbuster was having a hard time getting their online business going, and it was obvious.

Blockbuster Online improved in 2005 and eventually was a pretty good value. The Blockbuster Online service continued to be a pretty good value through most of 2006 and 2007. The real problems did not begin until late-2007 when Blockbuster began throttling the flow of DVDs to customers using a wide, ever-changing array of delay tactics.

Through much of 2008, 2009, and 2010, Blockbuster engaged in all sorts of bizarre and unsavory behavior such as rarely shipping DVDs on certain days, taking days to process DVDs, making subscribers stack the tops of their queues with "Available" DVDs, failing to register in-store returns, etc. In short, Blockbuster Online was back to being a joke--only this time, the joke wasn't funny. The service was just awful, absolutely awful. It was a horrible value, a major headache for consumers, and it was probably one of the main reasons Blockbuster wound up finally going bankrupt in 2010. Blockbuster not only deserved to go bankrupt, the company was out-of-control, and it needed to go bankrupt.

In April 2011, Dish Network bought Blockbuster at auction, and that was when things began to turn around a little. Here we are a few months later, and there is little to no evidence of Blockbuster Online blatantly throttling customers. Yes, Blockbuster Online has some substantial problems with availability, but the throttling is minimal or non-existent. For now, it appears Blockbuster Online is basically shipping DVDs when they should and not playing a lot of obvious, sleazy games with customers. This is most likely because Dish Network cannot afford to mistreat whatever few Blockbuster subscribers are left. In order to remain in the DVD rental business, Dish Network has probably decided to do nothing to trigger more customer defections from what is already a dangerously weak customer base.

Now, Blockbuster Online deserves no praise for shipping DVDs to subscribers as agreed. Blockbuster is just doing what they should have been doing all along. Since, however, Blockbuster Underground has been intensely critical of Blockbuster for at least a few years now, it is fair to make it clear that Blockbuster's DVD-by-mail service has improved remarkably since Dish Network took the reins of that deeply troubled company.

Please do not read this article as an endorsement of Blockbuster or any of its services. The Blockbuster name has been severely--perhaps permanently--tarnished by years and years of bad customer service in the stores and online. Millions of people hate the Blockbuster brand, and they have every right to do so. It will take years to rebuild trust among millions of alienated consumers.

Maybe the new Blockbuster is going to be a good company under Dish Network, but it is also possible Blockbuster could suddenly revert to its old ways. Only time will tell. If Blockbuster starts messing around again and begins taking advantage of customers, Blockbuster Underground will go right back to exposing every single wrong thing Blockbuster does. For now, on Blockbuster Underground, Dish Network is going to get a fair chance to prove they can and will deliver on what they promise to Blockbuster customers. Stay tuned.

Blockbuster: Please, Please Change Your Habits

Fast Company is running an article by Austin Carr about the problems with Blockbuster's new subscription-free DVD-by-mail program. Click the link below to read the article.

"Blockbuster: Please, Please Change Your Habits"

New Release Delays and Shortages at Blockbuster

A new trend seems to be developing at Blockbuster. Around February, finding new releases at least some Blockbuster stores became extraordinarily difficult. We are not talking normal shortages here. This is a stunningly low supply.

Last year, a customer could walk into a Blockbuster on a Tuesday night and almost always find the DVDs that came out that day. They would be gone by Thursday night, but they were still there on Tuesday. (New releases generally become available for rental on each Tuesday.) Now, the new releases are gone by Tuesday afternoon. Even after a particular title has been out for a week or more, the title will be completely gone or in very low supply. The odd thing is that the Blockbuster store may try to cover up the low supply by putting out dozens of those placeholders that look like the DVD jewel case. This could give the illusion that the store owns many copies of a title, but all of the copies are checked out. Given the low quantities of new releases in stock, and the unremarkable flow of customers, one might wonder if Blockbuster is actually purchasing very limited numbers of each title while pretending to have normal quantities in stock.

Now that is just one suspicious thing going on in some stores. Something far more serious also seems to be beginning. Since March, some new releases are not available at Blockbuster stores or Blockbuster Online. When questioned about why the new releases are not in stock, Blockbuster employees are claiming the titles are being held up by the studios, but this is very unusual. New releases for major movies almost always come out on time. It makes no sense that the studios would suddenly be incapable of delivering DVDs on time.

What makes more sense is that 1) Blockbuster's suppliers are withholding shipments because Blockbuster is not paying them quickly enough, 2) the studios are taking advantage of Blockbuster's weakened state and deliberately delaying shipments in an attempt to motivate consumers to buy new releases rather than waiting to rent them, or 3) the studios are offering price incentives that encourage Blockbuster to delay purchases of new titles.

At this point, the cause is completely unknown to the public, but something suspicious is going on at Blockbuster. Regardless, Blockbuster needs to remedy this supply problem immediately. One of the few benefits that Blockbuster has to offer its customers is having new releases the day they come out. Netflix and Redbox have already conspired with the studios to impose artificial release delays. If Blockbuster cannot have the movies before the competitors, there is no way Blockbuster can even think about being competitive.

Blockbuster Store Closings Create Privacy Concerns

Beth Givens with Privacy Rights Clearinghouse was recently walking by a Blockbuster store in Mission Valley, San Diego which happened to be closing down. Outside of the store, Givens found a box of case files that contained Blockbuster employee records, such as job applications and detailed employment termination documents. The documents contained private information such as social security numbers, full names, etc. There are probably signatures and birthdays too. This could be a gold mine for an identity thief or a wonderful supply of embarrassing employment information.

Luckily, Givens found the employee files before a criminal found them. Givens plans to return the files to Blockbuster, and it appears no harm was done in this case, but this incident should sound an alarm.

Blockbuster stores are closing all over the country. With Dish Network taking over, many more Blockbusters are likely to be closing later this year. If Blockbuster is mishandling files from abandoned stores, not only are the employees at risk, but so are the customers.

When you opened that Blockbuster account years and years ago, do you remember exactly what information you put on the account application form? Where is that form now? Could an identity thief use that form to steal your identity? What about your rental records, credit card information, address, etc.? What is Blockbuster doing to make sure this information is not going to fall into the wrong hands?

With all of these stores closing, Blockbuster/Dish Network needs to get on top of this issue. When people trust a company with their privacy, that company has a duty to protect the information of its customers.

Sold! Dish Network Buys Blockbuster at Auction

For some reason, Dish Network has chosen to drop $320 million on the purchase of Blockbuster, Inc. No one is quite sure what Dish Network intends to do with Blockbuster, but one might imagine that Dish Network could use this as an opportunity to create a big brick-and-mortar retail presence. Dish Network could be trying to position itself to better compete with Netflix by being on the street and in the mail in addition to the skies. 

By taking over Blockbuster's existing infrastructure, retail presence, customer base, relationship with movie studios, and merchandise supply channels, Dish Network now has the tools to become a potential threat to companies like Netflix.  Dish Network could now be in the unique position of being able to deliver all kinds of movies to all kinds of consumers in all kinds of different ways.  What other company has all of that?  Redbox has the rental kiosks.  Netflix has DVDs by mail and streaming video.  Many retail stores sell videos.  The pay TV channels and many other services offer video-on-demand.  Up until now, no one company has been able to offer it all, and no one company has been able to reach what is nearly the entire market of video renters/buyers.  Perhaps Dish Network will try to be the first to make that happen.    

Considering the harsh realities that Blockbuster had been facing, this deal is probably as good as it could get for Blockbuster. If Dish Network does wish to build a strong retail presence, they will probably not be liquidating Blockbuster (which had been an extremely likely possibility). If Blockbuster continues to exist in brick-and-mortar form, many Blockbuster employees may be able to hang on to their jobs for a while. Consumers will also not have to face losing one of their video rental options.

Not much is certain at this point, but the Dish Network takeover is probably being viewed as at least moderately encouraging news for anyone who likes Blockbuster or depends on the company for a living.