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Blockbuster Business Model: What We've Learned

I almost never go to Blockbuster to rent movies anymore — and apparently a lot of other people are in my boat: A recent CNN Money article termed Blockbuster’s economic state as “bleeding to death”.

Why?

Redbox and Netflix. People have found easier, more convenient, and less expensive ways to get the movies they want to see. Let’s take a second and compare Blockbuster and Redbox. What in the WORLD does this have to do with CATS and ATS software? Walk with me:>

Blockbuster

With Blockbuster, when you rent a movie, your are tied to that movie for a set amount of time (i.e. a New Release you are locked in for 2 days (at about 4 bucks/movie) — with regular movies, you’re tied into 7 days (at about 4 dollars). There’s no wiggle-room. You pay the $4 — even if you return the movie the same night you rented it.

Redbox

Full disclosure: I love Redbox. I love it because I have control of how long I rent a movie and how much I pay for it. If I want it for one night — I watch it, and return it the next day — and only pay a buck ($1) (Redbox charges $1/day). I’m not forking out $4 to keep a movie for a week when in all likelihood, I plan on watching it that night and not watch it again. If I want to keep it to watch with friends the next day — no biggie. I pay another dollar for another day.

The ATS Lesson

Redbox sales increased 99% last year in part because people didn’t have to commit to paying for a movie for longer then they’d likely want to hold on to it. People like the freedom to pay as they go — and we think people looking for ATS software are in the exact same boat: No Commitments. No Worries. Period.

At CATS, we actually let you try out the product for free first (imagine being able to watch a movie before deciding to pay for it?).

It’s a pretty good deal. Funny what you can learn from movie rental habits, huh?

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