blockbuster: a series of rheotorical questions

[Jeremy Blackman]

Although... their policy used to be to start selling the rental copies once you've made money on them. That could delay the sales even longer and force even lower prices. They'll start selling copies at a loss just to get some shelf space back.

This also means that heavy return days will be far less predictable (it used to be Sundays and Mondays, which are the most convenient days of the week for that), so the employees will be scrambling and mass confusion will ensue.

[Pwaybloe]

This is going to hit Blockbuster where it hurts. What a stupid move.

I can't figure it out either.  

In a marketing sense, it's the best way to fight someone like Netflix.  Still, Netflix has minimal overhead and better market flexibility.  

In a business sense, it's insane.  Can you imagine going in front of the Board and saying they are cutting 250-300 million out of revenue for next year?  Do they really think they can make this up in gross sales from new customers?  Did they forget about the inevetible merger?  Did they forget about their recent stock devalutation?  

Their only chance is aquiring Hollywood Video.  Movie Gallery will quickly be squeezed out, eventhough they're ranked #3 (...and a distant #3).  So, Blockbuster will be king of the brick and mortars with crippling overhead.  While Netflix will bottom-feed and make healthy profits for time to come.

[MacGuffin]

Blockbuster rewinds DVD-by-mail fee

In another high-profile move to advance its position across all fronts in the home video rental arena, Blockbuster Inc. said Wednesday that it will again reduce monthly online subscription fee from $17.99 to $14.99. But what does this mean to Hollywood's major studios? According to several studio chiefs, not much. Rather, it's Blockbuster's recent elimination of late fees that has some studio bosses steaming. The percentage of net revenue to Hollywood's major studios from online rental is almost insignificant when viewing the larger picture, which shows overall rental revenue for this year down anywhere from 1%-15%, as was most recently reported by industry analyst Tom Adams. Besides falling rental revenue, Blockbuster now allows its customers an additional week to return videos without being dinged with a late fee.

[ono]

I only know a little bit about economics, so I can't comment on ALL of the ramifications of this, but it's gotta beg the question, like Pwaybloe said, how does Blockbuster expect to make ANY money with all these cuts?  I don't understand it.  They need to find better ways of competing than just slashing prices.  Better selection, and an unflinching eye towards so-called "family values" that would prevent them from stocking NC-17 titles (and foreign films).

[cine]

that would prevent them from stocking NC-17 titles (and foreign films).

But then they wouldn't be Blockbuster anymore..  

[Weird. Oh]

I only know a little bit about economics, so I can't comment on ALL of the ramifications of this, but it's gotta beg the question, like Pwaybloe said, how does Blockbuster expect to make ANY money with all these cuts?  I don't understand it.  They need to find better ways of competing than just slashing prices.  Better selection, and an unflinching eye towards so-called "family values" that would prevent them from stocking NC-17 titles (and foreign films).

Prior to a month ago I was a drone that worked at Blockbuster. I quit for several reasons, including major apathy towards their employees. However, Blockbuster believes if they keep their labor costs extrememly low, meaning have one person run a shift, raise the level of money spent on extraneous items, that they will make money. However, I think they fail to realize, that the people that rent from their stores, are 1) stupid, 2) cheap. I wanted to hang myself nearly every shift hearing from all the dolts that came up and rented.

Granted, Blockbuster is a business. They aren't going to cater to the so-called intellectual film crowd. While my store carried some interesting foreign titles and indie titles, they primarily focused on New Release. Their target customer is someone who just wants to be entertained. Of course, I had a few customers who I could talk to about good films. Far and few between however.


Edit: A tip for anyone who has a late fee. If you haven't thought of it already: If you have a late fee, you can pay for it at any corporate owned store. Therefore, if you go into another store across town and say "hey I have a late fee at so and so location, that store has to call the said store up and get the late fee. You see, you can just call from any old phone and say "Hey this is ______ from the ________ Blockbuster, Can I get a customer check?. They will say name or numbers, you give the name and they will say, so and so has a late fee. Now, you just say, okay they will pay it here. And wahlah, it's gone.

[analogzombie]

Why anyone would rent from Blockbuster is a mystery to me. We all hate them for many reasons, SO DON"T RENT THERE. why anyone would rent from any place other than Netflix is absolutely beyond me. the only time I go into a video rental store is to buy Hollywood Video's 3 for $25 used dvds of movies that came out a couplke months earlier. I won't pay $20 for 'Cigarettes and Coffee' but $8, sure.

[Gold Trumpet]

Why anyone would rent from Blockbuster is a mystery to me. We all hate them for many reasons, SO DON"T RENT THERE. why anyone would rent from any place other than Netflix is absolutely beyond me. the only time I go into a video rental store is to buy Hollywood Video's 3 for $25 used dvds of movies that came out a couplke months earlier. I won't pay $20 for 'Cigarettes and Coffee' but $8, sure.

Netflix unnerves me. Renting a video is almost as religious as going to the movie theatres. There is a thrill of just deciding last second to go out and rent a movie you want to watch right then. People I know on Netflix talk about policies they signed up saying they can have so many movies a month for such and such price. I just can't do that. Sometimes I go months without renting movies. I also can't wait 2 to 3 days for a movie that is only a rental. Unless the movie is on order for me to own, I won't have anything to do with it. There just seems to be unwritten rules for these things. That is why ever since Blockbuster left town I've been really slacking in watching all the movies. I have no place that carries everything. So for small town folk, Blockbuster was a haven and still is.

[modage]

GT, can you just not go against the grain for once?

[Gold Trumpet]

GT, can you just not go against the grain for once?

I never thought I was with this one.

[cine]

GT: the new joke killer.

[bonanzataz]

Netflix unnerves me. Renting a video is almost as religious as going to the movie theatres. There is a thrill of just deciding last second to go out and rent a movie you want to watch right then.

yeah, me too, but i signed up b/c of the selection. they have a whole bunch of old movies i want to see but blockbuster doesn't carry. it bugs me though, because they send me things i'm not in the mood for and i end up holding onto them for a month.

[Gold Trumpet]

GT: the new joke killer.

modernage never kids when it comes to disagreeing with me.

[MacGuffin]

Blockbuster pressuring Hollywood Entertainment

NEW YORK -- The battle for video rental company Hollywood Entertainment Corp. heated up Tuesday as Blockbuster Inc. threatened to make a hostile $1 billion bid to buy its smaller rival by the middle of next month if Hollywood does not honor Blockbuster's request to disclose certain financial information.

Blockbuster said it will launch its $11.50 per-share cash bid for Hollywood if, in fact, Hollywood accepts a lower bid from its own chairman and CEO Mark Wattles along with investment firm Leonard Green & Partners.

Blockbuster said its proposal represents a "substantial premium" over the $10.25 per share offered by Wattles and Leonard Green & Partners.

Last month, Blockbuster offered about $700 million to buy Hollywood. The company said its latest bid tallies up to about $1 billion, including Hollywood's debt.

"We believe that the proposal Blockbuster is prepared to make is clearly in the best interests of Hollywood and Blockbuster shareholders as well as consumers," Blockbuster chairman and CEO John Antioco said.

"Additionally, as we have said before, we believe the proposed transaction will better position Blockbuster to compete in the rapidly changing home entertainment marketplace," he said, alluding to newer business models that are challenging bricks-and-mortar rental stores, like video-on-demand and by-mail DVD services.

Calling it a "threatening" tactic employed by Blockbuster, media analyst Dennis McAlpine of McAlpine Associates said "Hollywood has stonewalled them" in opening up its books so that Blockbuster may gauge whether it might further increase its bid for the company.

While Hollywood awaits outside direction from its board of directors, McAlpine said that any decision could still take time. Hollywood, he said, already was supposed to have decided a few weeks ago on which, if any, bid it would accept.

But Hollywood might have to move quickly, according to Wedbush Morgan Securities analyst Michael Pachter. "Blockbuster's actions today will prompt shareholders to place pressure on Hollywood's board over the next several days," he said in a report. "We also believe that Blockbuster will ultimately prevail in its attempt to acquire all the outstanding stock of Hollywood."

Citigroup Global Markets Inc., Credit Suisse First Boston and J.P. Morgan are advising Blockbuster on its proposal and have said they have committed financing to complete the tender offer.

Blockbuster shares closed down fractionally Tuesday at $9.33, while shares of Hollywood were fractionally higher at $13.16, suggesting that Wall Street sees the firm eventually selling for more than Blockbuster's current offer.

[Myxo]

Well, I know Mark Wattles of Hollywood Video.

Their corporate office is here in Oregon and I worked there for a good 10 months or so. He's a really kick ass guy and super smart. From what I understand (speaking to friends who still work there), Mark wants to buy out Hollywood Video and take it private again. Who knows though, for a billion dollars maybe he might consider it. One thing is clear.

Blockbuster sucks ass and they know with Hollywood around gobbling up more and more market share, they just can't compete. Not gunna happen.