Blockbuster's Bizarre 3-Month Delay on By-Mail Offerings

Blockbuster's last-ditch effort to attract new customers is like a gamer garage sale.

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For Blockbuster, immediate access is everything. The company has built its business on having content faster than Netflix and Redbox and may soon file for bankruptcy because of it. Blockbuster CEO Jim Keyes constantly boasts of the rental store's 28-day advantage over competitors, and has told me time and again: "People want rushed content—our job is to provide it for them." Longer-tail titles—older content—is simply not Blockbuster's business. Unless, of course, it means launching a last-ditch effort to attract new customers.

Last month, Blockbuster added video games to its by-mail subscription service. The new feature was heralded by the company's head of digital strategy Kevin Lewis as "yet another convenient way to access entertainment content from Blockbuster." Combined with its movie offerings and lower prices, the service seemed to make video-game subscription competitor GameFly all but irrelevant. However, the company failed to mention that these video games come at a significant cost: a huge three-month delay, which isn't just way longer than GameFly customers wait, it's longer than even Netflix or Redbox must wait for many first-run movies.

As one frustrated customer pointed out, though Halo: Reach was released Tuesday and is one of the most anticipated video game titles of the year, it will not be available by mail through Blockbuster until late December—a full 105 days after it's available through GameFly. Is this an error? A typo? We delved deeper, and discovered a slew of new titles that are unavailable for months, from Madden 2011 (released in August, but not available until late November) to Killzone 3 (launching in February, but not available through Blockbuster until mid-July). GameFly doesn't have these enormous delays, so why the wait?

Since Blockbuster has not returned our requests for comment, we skipped right to the source: Blockbuster Customer Care. Turns out, Blockbuster has imposed a minimum three-month delay on new titles for its by-mail video game subscriptions—a delay they somehow neglected to mention when launching the service. According to the Customer Care operator, this window enables Blockbuster to keep its subscription prices lower.

What good is a by-mail subscription service if you have to wait more than a hundred days for certain titles? Doesn't that go against the entire philosophy of Blockbuster and Jim Keyes, who has said that such delays from Netflix "hurt [my] head?"

"Listen, Paul Blart: Mall Cop? Yes, you can see it on Netflix—it's only a year old," Keyes said once. GameFly could just as easily say the same thing of Blockbuster.

According to one industry source familiar with by-mail subscription plans, Blockbuster's delay is very unusual, especially for video games, which do not require expensive licensing deals like movies. The source tells Fast Company that video games typically have no restrictions on when they can be offered, and that almost every other service buys them up-front and has them available the day of release. "It appears Blockbuster is gathering up old store inventory, and making it available to customers," the source says. "Essentially, they have all these video games, so they just stick it in their by-mail business," the source says.

Which would make sense. Blockbuster's $900 million debt and impending bankruptcy is keeping it from any aggressive expansion. For its movie service, this means the company has not had the liquidity to advertise its 28-day exclusive window over Netflix. For video games, it likely means the company is unable to purchase the inventory needed to create a fully stocked library for its by-mail service. Rather, as Blockbuster shutters more of its stores—it has closed hundreds this year already—the leftover inventory is just re-purposed for a by-mail service. Newer video game titles? Only available as in-store rentals.

As the rumors of Blockbuster's bankruptcy become reality, we should expect slapdash efforts like this—features the company touts that are nothing more than re-packaged offerings from its struggling business. That type of recycled, desperate thinking is perhaps why Blockbuster is heading toward bankruptcy—and why competitors Netflix, Redbox, and GameFly are able to stay ahead of the game.