Read My Lips - the blog

First and last late fees, maybe

George Atkinson, the entrepreneur who opened the first video rental store in Los Angeles, California, died on March 3rd at age 69. Back in 1977, it was much more expensive to rent a video tape.

Atkinson charged $50 for an annual membership and $100 for a lifetime membership. Members could rent movies on Betamax* or VHS for $10 a day.

From his initial storefront on Wilshire Boulevard in Los Angeles, Atkinson went on to organize the opening of more than 600 Video Station affiliates nationwide. He retired from Video Station in 1997.

*Betamax -- if you remember that, you probably also had eight-track tapes for your stereo!

To start his rental business, Mr. Atkinson bought 50 movies that had recently been made available on video, including 'The French Connection,' 'The Sound of Music' and 'Butch Cassidy and the Sundance Kid.' He then advertised their availability for rental in a one-inch ad in The Los Angeles Times. Customers arrived in droves and willingly paid the $10-a-day rental fee. (Only the wealthy could afford the $1,000 that VCR's cost then.)"

Of course, back in those days most of the studios were embroiled in a lawsuit against Sony for selling VCRs, which they viewed as tools for infringement, and they were all swearing up and down that they would never release their movies on video. it took brains and guts to open a video store that rented out Hollywood movies at a time when Hollywood was swearing enmity to the VCR and proposing to have it banned by law.

Now, Blockbuster Video has even made it into the Guiness Book of World Records

Blockbuster is the world's largest video retailer with a 30% market share. The first store opened in Dallas, Texas, USA, in October 1985 and the company now operates 4,438 stores in the US and 2,005 international outlets in 26 other countries. Each store offers between 70,000 and 10,000 different titles.

Although no one denies that renting movies on video tapes or DVD's is much less expensive now, Blockbuster's advertising of "no more late fees" is being tauted as fraudulent:

"Blockbuster boldly announced its 'No More Late Fees' policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due," Attorney General Harvey said. "Blockbuster's ads are fraudulent and deceptive. They lead people to believe that an overdue rental will cost them absolutely nothing when, in fact, customers are being ambushed with

• late fees in some stores
• so-called 'restock fees,' and
• credit card or membership account charges equal to the purchase price of the video."

Posted by Susan R at March 10, 2005 09:35 AM