NEW YORK (CNN/Money) -
Blockbuster is going national with an in-store subscription plan that allows its customers to rent an unlimited number of movies and keep up to 3 movie titles at a time without being charged late fees.
The company said Tuesday that the new program, called "Movie Pass," will be available immediately in nearly all of its stores in the U.S. after a successful 18-month run in four cities.
Blockbuster's new plan, similar to the subscription program used by Netflix Inc., is part of its effort to combat stiff sales competition from Netflix (NFLX: up $0.15 to $32.25, Research, Estimates), pay-per-view on cable and cheap DVDs for sale from stores such as Wal-Mart (WMT: Research, Estimates).
Last month, Blockbuster reported lower first-quarter sales and said it expects 2004 earnings to fall over 10 percent.
The company also forecast revenue to increase in the low single digit range.
Dallas-based Blockbuster said it will charge $24.99 a month for customers who want to rent up to two movies, and $29.99 for those who wish to rent up to 3 movies. Netflix's service charges $22 a month for up to 3 movies at a time.
Blockbuster said it plans to add an online-reservation feature and mail-delivery to its plan by the end of 2004. Customers will be able to subscribe movies online and receive them in the mail, Jerianne Thomas, a spokeswoman for Blockbuster, told CNN/Money.
But the customer will not be allowed to return those movies to a retail store until 2005 when an intergrated model will be introduced.
Thomas said an average Blockbuster store carries about 9,000 to 10,000 DVD and VHS copies. Netflix, on the other hand, claims it has over 20,000 titles on its Web site.
Blockbuster (BBI: down $0.21 to $15.47, Research, Estimates), owned by Viacom Inc. (VIA.B: down $0.26 to $37.79, Research, Estimates), said the new rental program would cover all DVD and VHS titles in the stores. It has more than 5,600 locations throughout the U.S.
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