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As the good ship Blockbuster gracefully slips beneath the waves, customers are jumping overboard in huge numbers, according to Wedbush Morgan Securities analyst Michael Pachter. While predicting that Netflix will announce an increase of 1.6 million new subscribers during the first quarter of 2010 when it reports its Q1 financials this week, Pachter said that the growth will largely come at the expense of Blockbuster and other B&M stores. Said Pachter:

“Blockbuster is losing customers to Netflix and Redbox at an unprecedented rate, driving continued upside to Netflix’s financial performance,”

Pachter went on to predict that Netflix will close out 2010 with between 15.5 million to 16.3 million total subscribers, which is an increase of more than four million during the year. A recent series of lifeline deals tossed to Blockbuster by studios will not be enough to turn the tide, says Pachter.

A show of hands, if you please, Insiders. How many of you pity once-mighty Blockbuster, and how many feel that the stumbling giant has earned its fate? Make your opinions known in the comments.

(via Home Media Magazine)

32 Responses to “Analyst: Blockbuster Bleeding Customers at ‘Unprecedented’ Rate”

  1. Visitor [Join Now]
    sfmitch [visitor]

    Blockbuster is getting exactly what it deserves.

  2. Member [Join Now]
    john [miezu78]

    I feel pity for blockbuster, I remember as a kid about 16 going with friends trying to rent rated R and hoping they store clerk will let us without having to call our parents…and jest wasting an hr with friends inside the store deciding what movies to get. but I do not miss the high prices. I use Redbox exclusivity now, Ive used Netflix on and of and i love it. Its jest sad because blockbuster has no chance to lower their prices because of the high overhead.

  3. Visitor [Join Now]
    TrickyM [visitor]

    I feel pity for the employees of the stores, as they just do their jobs and don’t have any say in prices and whatnot. I really hope people aren’t placing blame on store level employees because thats really not where the problem is. The bottom line is that with companies like Netflix and Redbox, we as consumers now see that Blockbuster truly has been ripping people off for years. Up until this point, we didn’t realize how much profit they were actually making, and then comes along a company like Redbox charging $1.00 per day, and doubling in profit during these economic times. They also give out free rentals for their valued customers and again are still doing well. Netflix is also very reasonable considering all the money they pay for postage.

    I also didn’t like the used movie process at Blockbuster. I hate that the movies came in generic cases and the cover art was photo copied. Although the in store experience was typcially nice for me, I can’t help but feel no pity for the individuals who were lining their pockets at the expense of consumers. If Blockbuster plans to change their ways now, that might be something to consider, but it’s sad that it took other companies destroying them in a competitive fashion for them to finally charge reasonable prices.

    • Member [Join Now]

      yes but redbox is doing better.. because they dont have a store to shop in.. no electricity.. no bills for the store.. no employees.. except the ones who deliver the movies to the box. so theyre saving out the ass. I think blockbuster is ridicilous with their 5 night rental crap. The only thing about redbox that sucks… is.. there is not a large selection.. just new releases.. and they should have video game ones next to it. like a game box.. 2 or 3 bucks a night.. then they would be in business.. they would probably double to triple their profits easy… and make their boxes 4 times larger… more movies to choose from. and more new releases so i dont have to drive 2 miles to the next one to get avatar.

      • Visitor [Join Now]
        insider [visitor]

        The reason Redbox hasn’t done games is you really need to charge $3 per day since games wholesale are around $40 to $45. I’m not sure a lot of customers would pay $3 per night.

        • Visitor [Join Now]
          nvthrower [visitor]

          I don’t know about where you live, but Redbox has been renting games at 2$ a night in Nevada for quite a while now.

          • Visitor [Join Now]
            insider [visitor]

            Exactly. If it was profitable at $2 per day don’t you think it would be national by now? Especially as quick as Redbox grew with DVD.

      • Visitor [Join Now]
        TrickyM [visitor]

        Actually I’m pretty sure the machines run on electricity, again I’m not a rocket scientist but I think that’s a safe bet.

  4. Visitor [Join Now]
    JC in NC [visitor]

    As some people have stated, I do feel sad for the employees as they were only doing their jobs but BB is getting just what they deserve!! After years of getting ripped off by those b**tards, I’m loving seeing their long, drawn out demise. Long live Netflix & Redbox!! I’m lovin’ them!!! Burn BB, Burn!!! Ha!!!

  5. Visitor [Join Now]
    Mark myers [visitor]

    Having worked at blockbuster, I can say that they have been walking on thin glass for years now. Pulling charges on customers that are not reasonable nor fail. For instance. Of your creditcatd is on file and you don’t bring you movies back on time and get late fees. That day within a hour of the system showing that late period after a few days, it will attempt to charge your card on file. Given we have all that in the terms but you have no idea what you are being charged until you get your statement and you find you had a movie a few days late or it was autosold. Blockbusters communxation eith the customers is lacking and also the communication within the company too.
    The part that everyone is getting pissed about is that corporate or the DMs are blaming the employees for the corporates terrible decisions.
    They are trying to make somekind of a turn around with everyone pushif sales of candies popcorn and soda. But really. It just pisses everyone off when old cusomers come to get a movie and you have a salesman shoving stuff in your face.
    It’s like car shopping and you just want to look or you know what you want and the sales guy wants you to get something “better” and more expensive.
    Major turn off.
    Blockbuster is loving in the late 90s still. Wake up guys. Get it together.
    Oh. And if we have to sell crap just to get hours. Then we better start getting commission. I’ve worked in a place where income is 100% commision. I don’t need this from a minimal wage shit company that’s “knows what’s best”.
    We are CSRs. Not salesmen.
    It is not our job to sell special deals. You need to market your store for customers. Or. Maybe actually focus on what customers want. Movies. Games. No cheats. No gimmics.
    Thank you

  6. Visitor [Join Now]
    TrickyM [visitor]

    I can completely agree with you Mark. You brought up some fantastic points, and unfortunately the sad reality is that where the customer service team can really be utilized to develop some ideas that would really help the company they are typically ignored because they don’t wear a suit to work. On a side note, I find it ironic that this website is called “Inside Redbox” and on this page alone there are 3 advertisements for Netflix…..

  7. Visitor [Join Now]
    FalconFour [visitor]

    Y’know what’s funny? I think I’m going to sign up for Blockbuster’s online service. I do have a lot of DVDs I need to re-cop^h^h^h watch, that are too old/obscure to be in Redbox. I haven’t used Blockbuster Online since about 2006, so I wonder how their service has changed in these dying times. Because when a business is at risk of dying, they tend to do some amazing things… let’s see how this goes.

  8. Visitor [Join Now]
    MovieBuff [visitor]

    My local BB used to dictate terms when the back of the card clearly stated otherwise. Like a month membership (according to the card) was good from the date purchased to the day of the next month. They tried to tell me it was only 30 days. (I avoided months like Feb.) After arguing with them, they scanned my card, which was valid, and I walked out with my last movie from them. That was back in 2004. How are you doing without my business now, BB?

  9. Visitor [Join Now]
    Dontcareatall [visitor]

    Maybe Obamanomics can bail them out.

  10. Visitor [Join Now]
    TrickyM [visitor]

    Obviously the spell check is up to us…….

  11. Member [Join Now]

    yeah.. why would anyone want to rent a movie for 5 nights for 5 bucks anyways? im not gonna watch the same movie 20 times.. they dont make any damn sense.. its only for their convenience.

    • Visitor [Join Now]
      Glenn_Va [visitor]

      Agree. Don’t need to check out a movie for a week just so it can sit on the table until I get around to watching it. Besides, Blockbuster’s prices were not even competing well with cable providers or companies like Netflix. Guess the big difference here is that Blockbuster has to people people and stores. In any case, they could have drawn down their number of stores to see if they could continue to be competitive. The Redbox model works for me.

  12. Visitor [Join Now]
    Mike [visitor]

    Blockbuster’s model worked when they had no competition and was a store only business. I’m not saying I enjoyed it but it had success. Over the last (10?)years businesses like netflix and redbox have been slowly been stripping away blockbuster’s business because of the bigger selection or not being forced to get a rental for five days when you don’t need it. Although I will admit it was nice to have blockbuster for game rentals and I haven’t heard anything about netflix or redbox doing that. Wegman’s used to have a $1 a day video game rentals. I know there’s Gamefly, but if you don’t enjoy the game you can wait up to four days to get another game and I’m not crazy about that idea.

  13. Visitor [Join Now]
    IHateBlockbuster [visitor]

    The way Blockbuster treated customers with poor service and outright lies, it deserves everything it gets. Blockbuster was always trying to rip off its own customers. Netflix is a dream compared to Blockbuster and Redbox is so convenient. Who needs Blockbuster. The remaining Blockbuster stores are just wasted space and who needs any kiosk other than Redbox? It is time for Blockbuster to go!

  14. Member [Join Now]

    So how will this affect Warner and Fox and that other company that jacked Redbox with the 28 day crap. If BB is going under and is losing customers left and right, will those studios get that or will they just stick to their guns and lose money?

  15. Visitor [Join Now]
    donny [visitor]

    Screw Blockbuster.
    When they started editing movies back in the early 90’s so that the movies would be more “family friendly” I swore I would never rent from them again. Movies are works of art and should not be censored to make a buck.

  16. Visitor [Join Now]
    angry jerry [visitor]

    blockbuster has always ripped people off and they are getting what they deserve.

  17. Visitor [Join Now]
    angry jerry [visitor]

    just like the facist republikkkan party…blockbuster is dead.die nazis die

  18. Visitor [Join Now]
    Jeffery [visitor]

    Blockbuster did all this themselves with their corporate greed. I use to have the Total choice back in 05. it was a great price . then like 3 months later they raised it by an extra $20. I never went back.. I hope they go out of business and take all their sorry ,good for nothing employees with them…Good riddance Blockbuster .. I love NETFLIX

  19. Visitor [Join Now]
    Toni [visitor]

    what are you Jeffery… a 40 year old fat slob hiding behind a computer at his mommy’s house… It took George Bush 2 terms to get the US in this horrible state, its gonna take more than just one year to fix. Have fun listening to SOB’s like Glen Beck, Bill O’reilly, and Rush Limbaugh. The economy didn’t get this way over night…
    Get back to the subject its Blockbuster Vs Netflix & Redbox
    what a fag