There's been much mention this week of how well Blockbuster's doing with its online video rentals; Wednesday, the Dallas-based company announced it ended last year with some 2.2 million online rental customers, due mostly to something called the Total Access program that allows customers to rent DVDs on the Web and then return them in stores. Blockbuster's doing something most folks thought previously unimaginable: cutting into Netflix's biz, forcing it to use its hard-earned to promote, promote, promote where before it could merely, oh, hoard. Shares of Netflix are down, accordingly. You can almost hear Blockbuster execs from way across town: "Ehhhhhhhxellent."
But there's at least one fella we know of who isn't happy with the success of the online rental business, and that's Fred Montesi III, decribed this morning as "a member of the well-known Memphis grocery family." He's suing Blockbuster in federal court, says the Daily Times outta Memphis, alleging that all that money he's spent paying for a franchise license from Blockbuster is going to waste since the company's now moving its business focus online. Montesi's company, Southern Stores Video Inc., forks over to Blockbuster $2 million a year under an exclusive license agreement, reports the paper, and Montesi's peeps claim Blockbuster's killing their business by keeping customers out of the stores. I didn't realize people still rented videos. I just thought they downloaded them off the Internet and burned them to DVD or their iPods. Seriously, you can still rent a video? In a store? How...quaint. --Robert Wilonsky
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