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Interesting Blockbuster Article
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Good article, it just reaffirmed some of the speculation with solid numbers and data. The interesting part to me was that Blockbuster had the opportunity to buy Netflix on the cheap and passed. Does anybody else know any of the backstory on that or how long ago that deal was proposed?
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I half-expected to see a Blockbuster bancruptcy filing before 2005 ended - I can't see how they can go on much longer, especially as more and more alternatives are available, and sell-through prices on catalog titles keep dropping, They can't survive on renting a handfull of hot new releases each month.
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Can't say I feel sorry for BB.
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There was some speculation in the early years of DVD that they'd try a rental model like VHS, so most titles would be priced around $100. With the proliferation of illegal copying methods, they're REALLY smart to have not done that as copying would be going through the roof right now. The laserdisc market probably would've stuck around a lot longer too, since you could at least buy new releases on that for around $30-40.
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Personally, i'd hate to see Blockbuster go under. I really haven't had a problem with them at all, enjoy picking up used DVD's and games from them, and like being able to rent a movie every once in awhile.
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Yea, the only thing I'm going to miss from BB is the used DVDs as they had OOP DVDs from time to time. Oh well........I haven't been there in months anyway. A big corporation going belly up=no loss of sleep.
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The Last Days Of Blockbuster
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Yea, I read the article earlier this morning. I don't think I'm going to lose any sleep over BB going belly up.
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Well, I for one cant wait to see the demise (eventhough I dont think its inevitable just yet). The one thing that BB could have done to help itself would be to add better customer service, and as most of us know, that never will happen. Oh well, good riddance.
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Originally Posted by jdumbjokes
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Originally Posted by jdumbjokes
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Great stuff. Thanks for sharing this article, OP. I've been awaiting BB's demise since the past year or so. I'm forgoing my renewal for their specialty package this year, which I've paid for over the past two years just to get those free monthly rentals. I just had no reason to rent that much anymore, and a free rental once a month was a good deal for a final cost of like $10 a year.
I've been following the final death throes of Blockbuster once a week for over a year now at VB Online. Here's the latest article from this week's issue (in which Antioco mentions store closures): Antioco: Big Blue pull-back not over Also seems to hint at return of late fees By Paul Sweeting 1/10/2006 JAN. 10 | Blockbuster chairman-CEO John Antioco said Tuesday that 2006 could bring further retrenchment as the rental giant tries to find its feet after staggering through 2005. Speaking at Citigroup’s annual Entertainment, Media and Telecommunications conference in Phoenix, Antioco predicted an industrywide decline in the number of video stores this year, including Blockbuster stores, and hinted Big Blue might look for ways to restore the revenue it lost by eliminating late fees. “When we modeled No Late Fees, we assumed we’d see an uptick in in-store rental activity, and we’ve seen that uptick, but it has not been quite as large as we expected,” he said. “We thought it would be around 8%, and we didn’t quite get there.” Though Antioco said he still believes eliminating late fees will pay off for the chain by 2007, he added: “Nothing prevents us from reinstating late fees, or taking some price increases, or raising re-stocking fees. There are a lot of things we could do if we have to, but right now, we think we have a competitive advantage.” That competitive advantage won’t spare Blockbuster from further cutbacks, however. “I think all players in the industry, whether they’re independents or Blockbuster or Movie Gallery will have to take a look at their store portfolios,” the Blockbuster chief said. “Overall, I would expect a 10% to 15% decline in store capacity industrywide over the next three years. I don’t think Blockbuster’s rate will be that high, but we will be increasing the net number of stores we close over the next few years.” Antioco said the cutbacks would ultimately improve Blockbuster’s rental comps. “I would hope that the rate of capacity shrinkage will be greater than the decline in the overall business, and that will be good for comp-store profitability,” he said. As for his own fate at the company and his relationship with Carl Icahn, the financier who engineered Antioco’s ouster from the board last year only to re-instate him, Antioco was circumspect. “If the question is what Carl will do in this round of board votes, which I think he has to figure out by February, the answer is I wouldn’t speculate,” Antioco said. Icahn controls two seats on the board after winning a proxy fight against management last April. Under Blockbuster’s staggered directors’ terms, Icahn could conceivably gain control of the board by running another slate of candidates this year. |
Maybe I am wrong, but I don't recall Lieberfarb and Warner ever offering that rental pricing deal to Blockbuster for dvd. In fact I seem to recall that as early as late 1997, Warner and a few other studios had made up their mind that dvd was going to be a sellthrough market. I remember reading articles in Videostore Magazine, that Blockbuster was actually trying to throw their weight around and convince the studios to go with a rental pricing plan, as it would keep cheap priced dvds out of the hands of the independant rental stores (which still had a little bit of a presence at the time).
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Can't expect to stay in business when this whole "no late fees" deal means there's never anything in the stores to be rented. "Guaranteed more titles" or not.
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I still say that they should team Pizza Hut and Blockbuster together and then they can deliver a pizza and a movie. Always thought that was a good idea...
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The only studio I know of that was experimenting rental pricing was Fox, but that was in another region.
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It would be really bad for consumers if BB went under. It will lead to price hikes by Netflix. I say we need more companies in this business which would start price wars.
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Originally Posted by mr_jbloggs
It would be really bad for consumers if BB went under. It will lead to price hikes by Netflix. I say we need more companies in this business which would start price wars.
I don't like BlockBuster, and will never shop there again. However, I don't want to see them go under, simply because of what was posted above. |
Originally Posted by mr_jbloggs
It would be really bad for consumers if BB went under. It will lead to price hikes by Netflix. I say we need more companies in this business which would start price wars.
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Originally Posted by mr_jbloggs
It would be really bad for consumers if BB went under. It will lead to price hikes by Netflix. I say we need more companies in this business which would start price wars.
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I wait the day that BBV dies. I will dance and drink and be merry.
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Originally Posted by Michael Corvin
Exactly. This could very well impact bargain bin prices as well. Once rental chains are out of the way, those bargain prices to lure you from renting will creep back up.
And this creates profits for the company how? |
Originally Posted by gijon213
I still say that they should team Pizza Hut and Blockbuster together and then they can deliver a pizza and a movie. Always thought that was a good idea...
rotfl rotfl |
Originally Posted by slowcloud
Not necessarily true. Economics are much more complicated than that.
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