Rental giant Blockbuster has once again adjusted its expected earnings from the 2009 fiscal year, and the direction isn’t up. After a dismal fourth quarter, Blockbuster is now anticipating a net loss of 3 to 3 million, casting further doubt in the minds of analysts and the renting public that the beleaguered company can stay afloat.
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Eric Wold, an analyst with Merriman Curhan Ford, was surprised by the magnitude of the company’s latest downward revision, and feels that the increasing losses indicate that Blockbuster’s latest efforts to make its stores and stock selection more enticing to consumers have failed. Said Wold:
“It seems as though [these efforts] didn’t matter to consumers if (in our opinion) they are going elsewhere to rent movies anyway,”
Wold, who frequently covers Redbox and Netflix, echoes the commonly held perception that the home video rental market is marching inexorably towards kiosk, by-mail and online channels. According to Home Media Magazine, Wold thinks that the upcoming combined closures of nearly 2,000 Blockbuster, Movie Gallery and Hollywood Video stores “could put $500 million to $600 million of annual rental revenues up for grabs, including $375 million to $450 million to the kiosk and by-mail rental channels”.
Michael Pachter, an analyst with Wedbush Morgan Securities, feels that bankruptcy may now be a very real concern for Blockbuster.
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Said Pachter:
“Given today’s news, we must question how long the company can continue as a going concern given its rapidly deteriorating performance,”
In other movie rental news, Redbox parent Coinstar’s fourth quarter results are due in just a few weeks on February 11. Both Hollywood and Coinstar investors are anxiously awaiting the results, which will indicate whether Redbox’s ongoing feud with half of Hollywood and its expensive workaround operation are affecting its bottom line. Said Wold:
“Should Coinstar report fourth quarter pre-tax earning margins from 16% to 17%, this would prove that Redbox can be financially successful even if [it] loses the lawsuits and the current temporary workarounds become permanent,”
Is Blockbuster’s head now directly under the guillotine, Insiders? Should we start a BB death clock on this site? Let us know what you think in the comments.
[via Home Media Magazine]
Should we start a BB death clock on this site?
It’s now 4 minutes to midnight.
I love it. Check out Blockbuster’s stock (BBI), its at 49cents a share today, down 24cents on this news, as if it were a surprise to stockholders just how badly their company is doing. Bye bye Blockbuster.
Why do people want Blockbuster to fail, meaning hundreds of people will be out of jobs. The more rental options to the public means better competition, can’t people see that. Yes I know you all LOVE Redbox, I bet if they were the only company left for us to rent they will sure raise their prices. It nice to beable to rent from several places, as if I only rented from Redbox, I would have to wait over a week to get what I wanted or not even watch a movie until it comes on TV, as they just don’t have all the movies available.
I want them to fail because they are a company that has made a lot of poor decisions and they don’t respect me as a consumer. I’m sooooo tired of this “jobs” argument, where anything should be built and nothing should fail because of jobs. It shows a keen lack of understanding of the intricacies of economics.
I’m sure you have made some poor decisions too, at least they are fighting and trying to correct their bad decisions.
No, they’re not trying to correct thier poor decisions—they continue to treat the consumer like an idiot.
honestly maybe you are doing something to make yourself appear that way. If Blockbuster does go away tons of people will lose jobs, thats the truth and i understand economics very well enough to know that with the tons of people that blockbuster employs it will have a negative effect on our country’s economy and if you took atleast Macroeconomics you would know that too.
what about the people who lose their jobs .. What about my 100 shares of this company AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH lol : )
on topic though, i was talking to a manager at one of our local stores and they said …
They would be shocked if blockbusters STORES are even around come 2011..i guess 2010 will be the major year they test out the box market and they will mostly move to downloads or stand along machines (redbox) and shut down most stores
sucks i paid 2.85 per share for the stock Ouch closed around 49 cents per share….
lucky i only own 100 shares (285 bucks) its not like when i lost 20k when the AOL stock tanked in 2000
When you are in the market you are suppose to keep an eye on what’s going on.
You shouldn’t be in the market if you don’t want to watch your area of the market.
I don;t even play the market and I wouldn’t have even bought BB shares 4 years ago. It didn’t take a genius to see this coming.
Yeah, I think when Netflix came out 10 years ago it was pretty easy to tell BB was on the way out…
isent the 28 moratorium from netflix and possibly redbox in the next few day help blockbuster? When you want a new release and bot companies wont have them for 28 days you go back to blockbuster.
..and spend $4.99 instead of $1.00. Very smart, based on your english.
I had too much wine when I wrote that. You might not want to spend $5 on a rental, but others will. Its allot better than waiting 28 days.
blockbuster is here to stay http://insideblockbusterexpress.com/dvdplay-purchased-by-blockbuster-express/
They might stay as a STAND ALONE machine company (like redbox) doubt you see B&m stores past 2011
Actually NCR is here to stay. NCR owns all those BBexpres machines. They pay BB some minimal fee to put BB stickers on the machines. NCR hired a guy from Redbox/Coinstar to help them develop the NCR business. BBexpress machines DO NOT get new releases like their stores.
either way bye bye BB stores.
NCR/BBexpress chasing Redbox competition may be a little late…
Agreed!
NCR’s kiosks should just be called “BlueBoxes”!
Only wished more existed, preferably next to Coinstar’s.
Here in Fresno these kiosks are in every Vons Supermarkets , as the Blue ones are near San Francisco and are in Dollar Tree Stores . Blockbuster should take the hint and purchase kiosk and put them where there is no redbox right now I have to drive 4 miles to get to a redbox
I rented a movie from BB the other day (only because I had a gift card I got for Xmas) I was shocked that it cost $4.99!!! Are they serious?? Do people really pay that?!?
Sorry, to hear you were robbed like that (at gunpoint? lol). It’s clear Blockbuster has to change their business model to survive. They copied Netflix, now they want to copy Redbox. Still, BB has to differentiate itself from those companies and offer unique value to customers, so their business can progress.
i think their prices are so high cause they think everyone is going to join their REWARDS program .. where you rent 1 get 1 free and other junk… i remember 2 years back entertainment books were given the memberships out for free… I went maybe twice and got the free movie (non new release)
Blockbuster Express is cheaper than Redbox, with the buy one get one free, plus they have a bigger selection. Just slower machines, can’t beat $1.00 for 2 new releases.
I am probably old fashioned, but I love my local Blockbuster store. I also do Blockbuster online and love being able to trade my movies in at the store for new ones. I also appreciate face-to-face customer service, not standing in line in the cold forever while the idiot in front of me tries to figure out Redbox. Don’t get me wrong, I like Redbox, too. Perhaps our locations just suck. I admit, BB needs to make some price changes if they want to stay in business, but my local store beats a kiosk any day.
Well when you over price your product you tend to get whatever happens to you.If your customers tell you your prices are too high and you don’t listen then you should be put out of business
if yall were smart you would go to a library and check out the movies for free. The. Suburbs have the best selection and they have all new releases and even all tv shows on DVD. I’m in Illinois .
People are smart: they use the Library, Netflix, Redbox to get the movies they need for free or a low rental price. Just last week at my local Library, I got I Luv You Man; About A Boy; Lars and The Real Girl; and Grace ( a 2009 horror movie which I didn’t like and was much like It’s Alive) This week I’ll probably get Two Lovers that I saw at the Library (a 2009 movie with Joaquin Phoenix) and The Royal Tennebaums, AND get This is It and Bright Star from Redbox. Not all movies/dvds you want to see are at one place (Redbox/Netflix/Library) so it makes it necessary to use a variety of free or low cost sources to see the movies you want at a price you can afford. By the way, I got About A Boy because it was one of Shane’s picks for 10 best of the decade. It was cute BUT DEFINITELY NOT one of the top 10 of the decade. While at the Library I saw dvds for last decade movies I’ve already seen like Atonement and Quills and thought these movies show more depth than a movie like About A Boy.
Blockbuster is over-priced and has a poor selection of films I like, so they deserve to go. Redbox’s selection isn’t much better, but at least they’re only a buck.
i have not used blockbuster for 5 years.in my eyes they are dead.the netflix,redbox connection works perfectly for me.as for having to wait another 28 days,it does not bother me at all!die blockbuster die!!!!!!!!!