Late fees are back at Blockbuster; good luck with that

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If you still rent movies at Blockbuster, beware the return of late fees. The rental chain is reinstating late fees in the form of a $1 a day up to 10 days after the rental, capping fees at $10. Blockbuster is also shortening the rental period from seven to five days for $4.99 titles.

All this is meant to bring Blockbuster more in line with rival Red Box, but how can it compete with streaming content and the popularity of Netflix? The chain just posted a $435 million loss in its fourth quarter and is closing nearly 1,000 stores. Wal-Mart has purchased Vudu, which puts it into the rental game (although it has tried to compete with Netflix before and failed). And as popular as Netflix's mail order business is with more than 12 million subscribers, it's poised to be just as dominant as downloading or streaming rentals takes over. Nearly every major TV manufacturer has a partnership with Netflix to stream content directly to upcoming TV models.

Hollywood Video will soon be gone and betting men are wondering how long before Blockbuster meets the same fate. Will late fees save Blockbuster? Will the extra $1 a day repel its remaining customers? Shelling out $4.99 for a movie, driving back and forth to the store, adding a few more dollars for not bringing the rental back on time, all adds up. Whether it adds up to money in Blockbusters pocket or contributes to its end remains to be seen.

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