Movie Gallery Bows ‘PowerPlay’ Subscription Service16 Mar, 2009 By: Erik Gruenwedel
Seeking to re-establish itself in a packaged-media rental market dominated by Netflix and Blockbuster, Movie Gallery March 16 unveiled an ambitious discount subscription strategy aimed at driving foot traffic, incremental revenue and competing against rental kiosks.
Dubbed, PowerPlay, the program allows consumers to purchase points redeemable for movies, video games and concessionary items at local Gallery and Hollywood Video locations on a monthly basis.
The silver plan for $7.99 per month grants users eight points, which can be rolled over to the following month. Gold ($14.99) allocates 15 points, followed by platinum ($24.99) with 25 points and diamond ($39.99) for unlimited rentals.
Gallery/Hollywood library DVD movie rentals are two points (or $2) each, and three points ($3) for new releases. Blu-ray titles rent for four points ($4) and video games for five points, or $5 per title.
Each plan has a designated limit on how many titles can be out at a time and for how long. Customers are assessed a one point (99 cents) per day late fee based on the particular plan. Games feature five-day rental period.
Wilsonville, Ore.-based Gallery, which emerged last May from Chapter 11 bankruptcy protection, has no DVD-by-mail service or online presence compared with Blockbuster and Netflix.
Privately held Gallery (together with Hollywood Video) generated more than $1 billion in revenue after filing for bankruptcy in October 2007.
A 2009 video rental market report from Adams Media Research said brick-and-mortar DVD rental stores would generate $4 billion annually in revenue by 2013, down about 27% from $5.5 billion in 2008.
The culprit: DVD-by-mail subscription services and standalone kiosks.
Gallery believes discounted rentals coupled with retail customer service would continue to supercede the Internet and kiosks.
"Kiosks and online services have a place in our industry, but our new subscription service offers unprecedented pricing, convenience and selection that can only be delivered in-store,” said Clifford Torng, chief marketing officer.