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Author: realistTheorist One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 647  
Subject: BBY tries to sell in-store plans Date: 5/7/2008 9:46 AM
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A while ago, BBI raised the price of its online plans. From being $1 over NFLX, they became $3 over NFLX. I still stay with them, because I find value in the plan. Firstly, in-store exchanges gives me a degree of flexibility in timing that is a big value (to my kid). Second, the ability to use the monthly coupon on a game, is worth a buck or two. I would probably stay even if they raised it by another $2 or so, as long as it still has those two advantages.

However, I recently noticed that turn-around times have slowed considerably. It appears that they have added some type of waiting period when one returns a video to a store: probably trying to emulate the delay that would come from mailing it in. This dilutes the value proposition a bit. I suppose that they're still losing money, and cannot figure out how not to, without reducing the value they provide.

Last time I visited the store, they tried to sell me a monthly store-only plan that was more expensive than my online plan. This makes no sense. Maybe it would make sense to some other type of customer.

Another thing I notice about my usage of BBI is this: as time goes by, and I see most of the things in the store, and most of the older movies that I've wanted to see, BBI 's additional value offered (over NFLX) reduces. For my wife and me, it is now near zero. For our kid, it remains, but is reduced.

For a customer like me, the older plan that did not allow in-store exchanges, but came with 2 fortnightly or 4 weekly in-store coupons makes more sense. It would offer the same value, while reducing the "moral hazard" effects of the current plan.
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