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Blockbuster CEO Jim Keyes spoke recently at an investor event in San Francisco. The chief of the embattled rental firm touched on many important and timely topics affecting not only Blockbuster but the movie rental business in general. According to Keyes, Blockbuster’s continued existence will hinge on “its ability to position the brand across multiple distribution platforms”.

Keyes also noted that both “new kid on the block” kiosk operator Redbox and by-mail/streaming company Netflix present “formidable challenges” in the coming year. Keyes addressed the following topics in his remarks:

The future of Blockbuster
“The next 12 to 18 months are going to be very challenging. . . We are building a multichannel platform approach … [and] at the same time we have brand new competitors (Netflix streaming and Redbox) certainly taking some of the demand out of the market.”

Keyes also said that “he doubts kiosks would assume a sizable percentage of the rental market due to limited amount of product available in kiosks, in addition to the fractured support for kiosks among studios”.

Positioning the Blockbuster brand across channels
“The great opportunity for Blockbuster is to adapt to [all] the different use occasions, because that’s what these (streaming, kiosks, by-mail) represent,”

The CEO also mentioned a Blockbuster On Demand-enabled Blu-ray player from Samsung that is being pushed in Blockbuster stores, as well as its burgeoning kiosk business with partner NCR.

The availability of new release titles through Blockbuster On Demand
“I don’t think [studios] want to spend $400 million to make a movie like Avatar and then see it go in the all-you-can-eat buffet after 30 days. . . [They] are going to want to monetize it on an individual title-by-title basis as best [they] can.”

Keyes also said that Blockbuster will pursue subscription models based around formats such as children’s programming and Spanish-language content, and would also consider working with Hulu and other ad-based platforms.

Blockbuster’s potential expansion of digital distribution and kiosk vending into foreign markets
“As [our] DVD presence over the next five-to-10 years begins to decline, then we shift into our video-on-demand products. . . Blockbuster is the Starbucks of movies when it comes to consumer perception of where to get movies. We are the only rental brand known worldwide.”

On the recent closure of hundreds of Blockbuster locations
“The net increase for Blockbuster’s presence in 2010 was [actually] 9,000 additional points of presence [via kiosks],”

Keyes said that the media made the company’s situation seem more dire than it really was last year by focusing  on the 1,000 B&M locations Blockbuster closed versus the 10,000 kiosks that went into operation.

Matching Walmart and on price
“At some point you can’t [compete on price],”

Keyes admitted that “matching price points with Wal-Mart and Amazon was untenable, and that offering multiple distribution channels and convenience was Blockbuster’s only recourse”.

[via Home Media Magazine]

12 Responses to “Blockbuster CEO: Redbox and Netflix Present “Formidable Challenges””

  1. Visitor [Join Now]
    Vernon Dent [visitor]

    Blockbuster CEO Jim Keyes failed to mention that sales of Raisinets® and Goobers® @ the B&Ms’ counters are *increasing*, and as a result, convergence to break-even, is just around the corner! ;)

  2. Visitor [Join Now]
    Ross [visitor]

    I love the comment Keyes made about Avatar. I only wish he would’ve chosen a movie that hasn’t made over a billion worldwide. I’m pretty sure [they] have made more than enough on that particular film to not worry about the “all-you-can-eat buffet”.

    /Still haven’t seen it.
    //Can wait the extra months and get it through Redbox or Netflix.

    • Member [Join Now]
      The Turnip [the-turnip]

      “More than enough” is never enough. As long as there is potential for the studio make even more money on it, they will do so.

      • Visitor [Join Now]
        Consumer [visitor]

        It’s capitalism 101. The studio makes a product and you as a consumer make a choice on what to do with that product. The studio wants as much money as possible and you want to save as much money as possible. Sometimes you win by getting the movie for $1 or free. Sometimes the studio wins and you go to the theater,buy or download the movie.

        I can’t blame a studio for trying, yet as a consumer I am not prepared to pay $15 a person to see “Avatar.” But I am not mad at Fox. However Fox will have to wait a while before they see my money.

        And trust me, you can NEVER make enough money. The more money you make, the more the person next to you wants some of it.

  3. Visitor [Join Now]
    cheri [visitor]

    What I found interesting was that they mentioned that they would be more spanish speaking and children oriented movies in blockbuster now. Well, considering that I am not a child nor do I speak spanish….. it makes me even happier that the TWO Blockbuster stores that were within 5 minutes of my house are closed for business. They just could not compete with Redbox… I am a very loyal fan of Redbox… I have stood in the rain and the snow to get my movies from Redbox… and then had to swim home with them under my arms (just kidding about the swimming…lol). Serious though, I could care less about Block Buster… I quit using them a loooooong time ago… I LOVE REDBOX AND APPRECIATE THEM!

  4. Visitor [Join Now]
    FooBar [visitor]

    Bye Bye Blockbuster….good riddence

  5. Visitor [Join Now]
    FooBar [visitor]

    my prediction…
    Redbox and Netflix will be one company in the near future. Rent the latest releases from Redbox, rent the classics from Netflix.

    Bye bye Blockbuster, MovieGallery, FamilyVideo

  6. Member [Join Now]

    I haven’t rented from B&Ms for about two years and can not conceive of any way I would go back. Redbox and Netflix cover everything between them. In spite of my dislike for Blockbuster, I would consider renting from a blockbuster express kiosk if it was convieniently located, same price as redbox and if the redbox kiosks on my way home didn’t have the feature. I will likely continue to give redbox first dibs on new releases and use netflix for old releases, tv series and streaming.

  7. Visitor [Join Now]
    Kimmie Wimmie [visitor]

    If BB would just offer to let me rent a movie for $1 or $2 per night instead of assuming I want to keep it for 3/5 nights and charge me for that, I might consider renting frim them. I happen to be the person who rents the movie on the way home, watches it that night, and then returns it the next morning on the way to work/school. Why can’t they come up with something for that scenario? Or maybe they have and I just don’t know ‘cuz I haven’t been in one since Redbox hit my town!

    • Member [Join Now]

      Blockbuster is the only Rental outlet left near me with a store the funny thing is they have a redbox outside their door due to being located next to a kroger. They went to one day rentals but instead of $1 it is $3 i take advantage of it when there is something I want to see on blu-ray since redbox doesn’t carry any near me.

  8. Visitor [Join Now]
    Movie critic [visitor]

    Yeah I wish that were true.. but that is how they make their money. It needs to just go back to $1 a day instead of $2. Also the free codes for every Monday need to come back in.

  9. Visitor [Join Now]
    moviewatcher [visitor]

    If blockbuster didn’t encourage their employees to charge customers false late fees, maybe I would still be renting from them. I am happy to see that awful company suffer. I don’t think blockbuster can compete with the price of redbox and netflix.