I don't understand - how can they not charge late fees?

Since these services charge a fixed monthly fee in exchange for having a certain number of DVDs out, they have already factored in their plans that you will always have DVDs out. They don't really care if you keep out the same DVDs for a long time. In fact, if anything it saves them money because they don't have to pay to ship you new DVDs.

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Do online DVD rental services offer adult movies?
The following post in our Reader Question series is an actual user submitted question. Q: Do you recommend adult movie rentals online? A: The two most popular online DVD rental services, Netflix and Blockbuster, do not offer adult movies. But NextAdvisor.com has reviewed a third option, CinemaNow, which does not actually send DVDs through the mail, but [...]