Will Total Access be a Total Success?5 Jan, 2007 By: Jessica Wolf
I'm a bit bemused by Blockbuster's new Total Access TV advertising campaign that takes aim at Netflix.
"What if you decide you want another movie RIGHT NOW?" the ad queries, then shows a deflated-looking cartoon of a man waiting anxiously by the mailbox for his next Netflix shipment to arrive.
The ad then goes on to extol the virtues of Blockbuster's scheme to allow online subscribers to return and rent at in-store locations.
On paper, this sounds like a great idea — logistically, I wonder how easy it will be to pull it off?
Inventory management is going to be a struggle I would think. Sure, there isn't much difference between a store location and the consumer popping that disc into the mail and returning it to online subscription inventory.
But every time a DVD goes out from the store, that's one missing from the store stock.
And, doesn't basic business practice tell you that every transaction has an overhead to revenue ratio?
It seems to me, that if an online subscriber decides to make use of the Total Access and get his or her next rental from a store location, rather than waiting for the online order to arrive, doesn't that mean that entire store transaction is overhead?
I mean, the employee handling the transaction still has to get paid; the lights still have to be on, all that stuff. But technically, there's no revenue coming into the store to balance out any of those costs in that moment.
On the other hand, I do think Blockbuster has a good point that this Total Access plan will decrease churn. It is going to be a very attractive option for a lot of people, but especially families.
But it also is a little bit too late. The most avid, excitable, engaged subscription renters, I think you could argue, have already become well and truly "Netflixized." Netflix is more than just a way to get movies. It's a mentality. It's a frame of mind.
The site attracts — on the most prolific subscriber level at least — a very specific kind of obsessive movie watcher. Those obsessive folks were probably the biggest Blockbuster renters before the online era and the first to migrate to Netflix in the early days.
In that time, they've become the trendsetters, the groundbreakers. Blockbuster's Total Access may be appealing to them in that remote, clinical, transactional, convenience mentality, but it loses many of the other things that keep them on an umbilical to Netflix, which I would argue are equally important.
So where does that leave Blockbuster?
Well, with the families, just like the ones the company is featuring in its clever little ads.
That's great; Total Access is going to be a big boon to those families, those casual, spur-of-the moment renters who don't care about the interaction of the Internet and would rather not wait by the mailbox.
But, I bet a lot of those people are also on the lower-rungs of the subscription model. It is the $5.99-per-monthers and such who are going to take the most advantage of Total Access.
And anyone who's worked in the fitness industry knows — you make the most money by signing up people to use your service if those people don't ACTUALLY use it. It's better, from a strictly monetary perspective I would think, to sign someone up for a $20-per month subscription, but have them behave as though they were on a $5.99 subscription.
Blockbuster said this week that the company surpassed subscription goals to hit 2 million subs, but I wonder how many of those new subs came in at the lower-priced offerings.
I think Total Access very well might inspire Blockbuster's lower-tiered subscribers to make more and better use of their low-priced, more restrictive subscription plans.
But that doesn't necessarily boost the bottom line or allow Blockbuster a better return on investment.
It will be interesting to see how this plan shakes out.