The Homa Files

Question: when was the last time your were in a Blockbuster?

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Excerpted from Business Week: Blockbuster Plots a Remake, Feb. 24, 2010  

With its traditional video-rental business under assault, Blockbuster  has brought in restructuring advisers, looking to buy yet more time to remake itself in the face of new rivals and technologies.

Blockbuster’s plight comes amid major shifts in how people rent and watch movies. Consumers are now getting movies through Redbox, a unit of Coinstar  that operates $1-a-night movie-vending machines in grocery stores and McDonald’s outlets.

Netflix mail-order and online rental service has also stolen Blockbuster customers. Consumers are also watching movies and TV shows through on-demand cable services and electronic gadgets such as Apple Inc.’s iPod.

Blockbuster has adjusted its business, outlining plans to close nearly 1,000 stores out of roughly more than 5,000 world-wide.

As the movie-rental business has evolved, Blockbuster has moved into other video-watching services, such as its own mail-order service, DVD rental kiosks and a digital on-demand service, but it remains far behind its major competitors in those areas.

Blockbuster reaps licensing fees from NCR Corp., which rolled out about 2,500 Blockbuster Express branded vending machines last year and plans to have up to 10,000 DVD kiosks by the end of this year. Blockbuster’s kiosk presence is much smaller than that of Redbox, which has more than 22,000 vending machines.

Blockbuster’s mail-order service has about 1.6 million subscribers, compared with Netflix’s roughly 12 million.

There’s skepticism whether Blockbuster can realize enough value from new business offerings in time to offset declines at its traditional brick-and-mortar outlets.

“If they can’t build a profitable stores operation, then there is no Blockbuster. It’s real simple. If traffic doesn’t pick up by mid-year, we may just kiss this whole story good-bye. We got a dead-man-walking situation here.”

Full article:
http://online.wsj.com/article/SB10001424052748703503804575083792463467472.html?mod=WSJ_hps_LEFTWhatsNews

This entry was posted on March 4, 2010 at 7:00 am and is filed under Digital Media, Retailing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.