On July 2, 2007, the company named James W. Keyes (former president and CEO of 7-Eleven) as the new chairman and CEO. He introduced a new business strategy that included de-emphasizing the unprofitable Total Access online service, in favor of an in-store, retail-oriented model. His predecessor John F. Antioco attempted this same plan initially in 1997. Additionally, Blockbuster Inc. lifted the ban on using check cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their check card.[citation needed]
The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the medium itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point—customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70–100 before the end of the initial release period.[citation needed]
Blockbuster offered several online movie rental plans. In select cities customers could add games to their movie rental queue as if they were included in their plan, but game rentals resulted in a separate additional fee which was not displayed or charged until the end of the billing cycle.[52] Until July 26, 2007, Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Since then there were several changes back and forth with regard to this policy; as of March 2010 customers were allowed a limited number of in-store exchanges.
Analysts don't see any light on the horizon. In 2007, 73% of consumer spending on movie rentals occurred at brick-and-mortar stores, according to Adams Media Research. By next year, the research firm expects that figure to drop to 59%, with mail-order services like Netflix (NFLX) claiming 32% of the market. Overall revenue from video rentals has been flat at about $7.6 billion for the past two years
