BOSTON (CNN/Money) - I've got to give some credit to the massive Blockbuster PR and marketing team. The success of any corporate messaging crew is measured by how well the media relays the message that you want to get out.

Blockbuster (Research) wanted the public to hear that it had eliminated late fees for its customers. And most media outlets went with that message, preferring to spin the news as a dramatic element in the Blockbuster-vs.-Netflix, old-vs.-new tale.

The problem is that it's not exactly true. Sure, tardy Blockbuster members won't be hit with a $4 late fee if they're remiss in returning a rental. But if they keep the video seven days past its assigned due date, they'll be charged for the movie in full at the going rate for that day.

If customers don't want to own the copy of "Freaky Friday" that Junior rented, they have 30 days to return it for store credit -- not cash -- minus the rental fee and a $1.25 "restocking" fee.

Blockbuster investors didn't seem to mind, or were unaware of the deal's fine print, sending the stock up almost 10 percent since the announcement. This is despite the fact that, by Blockbuster's estimation, late fees would have accounted for $250 million to $300 million in operating income in 2005.

That's a pretty good chunk of change to magnanimously decline. Blockbuster was quick to assure investors that it wasn't being cavalier in erasing a nine-digit figure from its revenue ledger.

"We tested this in markets across the country," says Randy Hargrove, a spokesperson for the company. "Based on our experience in these tests, we believe we will be able to make that up in rental transactions and lower marketing, operating, and promotional costs."

To vet these numbers, I called Michael Pachter, an analyst with Wedbush Morgan, the top-ranked analyst covering the company, according to StarMine. Blockbuster says late fees account for 6 percent of its rental revenue.

As such, "only one in 16 people need to rent an extra movie in the new extended rental period to offset the late-fee loss, and that's not that hard to get," Pachter says. "When you let people rent for seven days instead of two, the consumer tends to grab the extra movie."

In other words, it's unlikely there will be a loss in revenue -- a win for Blockbuster.

Which raises an interesting question: Blockbuster famously guarantees that new movies will be in stock. What if people are picking up new movies and not feeling particularly hurried to return them? Won't that create inventory supply issues?

"We're confident we'll have enough product in stores," Hargrove says. "We've taken inventory into consideration when rolling this out."

Pachter, however, isn't so sure. "If people abuse the grace period, it will cause stocking issues." That's an added cost, so score that one to the negative side.

Finally, the announcement's timing is a bit curious. Blockbuster made an offer to buy rival video chain Hollywood Video last month and is waiting for Hollywood's board to make its decision on suitors, which could come any day now. A Blockbuster/Hollywood merger would undoubtedly raise some antitrust concerns because the combined entity would own 55 to 60 percent of the market.

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One of the Federal Trade Commission's big concerns in any antitrust case is whether the merger will result in higher prices, and Blockbuster's recent move could be construed as a preemptive strike.

"Look," Blockbuster could say at an FTC hearing, "we just did away with late fees. We just eliminated $250 million in revenue. We just spent $50 million in marketing costs educating consumers to the change."

It's pretty compelling, and representative of what is likely behind this move: an acknowledgment of a changing, post-Netflix video marketplace, and a public relations ploy to pave the way for a smoother Hollywood Video acquisition.

Score this whole pricing plan as a big win for Blockbuster.

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