Company to test no-late-fee movies

By David Koenig
Associated Press

DALLAS — Blockbuster Inc. officials say they believe that more people would rent movies if they didn't have to return the tapes and DVDs a couple days later.

The chain plans to test that theory this summer by letting some customers pay a subscription fee and keep a handful of movies as long as they want without paying late fees.

The Dallas-based entertainment giant has profited by devoting more shelf space in its stores to DVDs. Now it wants to head off competition from pay-per-view on cable and mail-order rentals from companies such as Netflix Inc. that offer more convenience.

Under an approach to be tested in one city this summer, customers would pay a monthly fee ranging from $19.99 to $29.99 to cover unlimited rentals for that month. For the smaller fee, they could get two movies at a time, for the larger fee they could rent three or four titles together.

Blockbuster also will test a variant in which customers would pay a yearly fee of perhaps $49.99 to $59.99 and get to keep up to three movies as long as they want. They would still pay a rental fee, typically $3.99.

Officials declined to identify the two test cities — a spokeswoman said they didn't want to tip off competing cable systems.