Blockbuster - no late fees is really not such a good thing

Blockbuster recently announced it's "No more late fees" campaign with much fanfare. As a consumer it does sound nice, but as a strategy for the company it's just terrible.

A consumer point of view
As a consumer, I went to Blockbuster to rent movies, and to return movies. Often, I would rent another movie when I returned one. These round-trips used to make me rent more movies than I currently do. Blockbuster's loss.

The easy road - (What Google can teach Blockbuster and many other companies)

Blockbuster took the easiest, least innovative approach to fight Netflix - lower cost. With the host of stores they have, they could have come up with much more creative and attractive ways to get customers. I have a few ideas on how Blockbuster could better use what they have:

1. "No more late fees" - but only for the online subscriber. The promotion cost of this campaign, just to get new people to sign up would be really low. For instance, whenever someone tries to turn in a movie late, ask them if they would like to sign up for the 15-day trial and their late fee would be waived. People are very likely to sign up.
2. Cheap rentals for the online subscriber - $1 instead of $4 if you want to just get a movie without having to wait for it. ("This movie is only $1 if you sign up for our online rental trial")
   
3. Returns - Movies that you rent online - either return them in-store or post them. Savings from reduced postage since the store can mail everything to the warehouse.
4. Also, if Blockbuster spends a little money on their supply chain, they could scan the returned item in-store, consider it returned and dispatch the next movie - something that Netflix can't do and would be attractive to customers - something they can use to fight Netflix. If more customers return in-store than return by mail, then there are even more savings for Blockbuster.
5. Special stores - turn a quarter of the stores into warehouse-like stores from where only online subscribers can go and rent. This would also be the place where you can return movies and where all the other stores mail returns.
6. Spend money on IT and supply chaining the stores so that it is much better connected (rather than make outrageous offers for Hollywood)

Really what Blockbuster can learn from Google is that one can be a late entrant to any market and still be successful as long as one is innovative ( gmail maps suggest)