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 Amazon.com 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]