Blockbuster CEO Jim Keyes just did an interview with Rick Munarriz over at the Motley Fool, and boy did he come out looking like a fool with some of his comments.
First off, let me say that I have nothing against Keyes or Blockbuster in general. If they can come up with a competitive play that benefits me as a customer, I would give them some of my business, as I have in the past. But, whether they can remains to be seen.
Now, on to the interview and the quote that I think shows just how out of touch Keyes and Blockbuster is on the current competitive environment.
The quote from Keyes:
“Neither RedBox nor Netflix are even on the radar screen in terms of competition,” he said. “It’s more Wal-Mart and Apple.”
My question is: Jim, what are you smoking?
While I am certain Wal-mart and Apple pose threats to Blockbuster, to ignore actual DVD rental companies like Redbox and Netflix as competitors is foolish at best, and delusional at worst.
So, what is going on here? Perhaps Jim is trying to ensure shareholders that Blockbuster is still one of the “big boys”, so only huge corporations (like Wal-mart and Apple) can even be considered as competition. Or, perhaps he sees DVD sales and digital downloads as the real threat, not other companies in the DVD rental space. While I think he is right about those threats, they certainly aren’t the only ones Blockbuster is facing.
Some of the comments on the Motley Fool article show a different tune than the one Keyes is singing, too…
Funny stuff… Here in Denver, one of the most profitable and busy Blockbuster stores in the entire region … just closed its doors. …if Blockbuster wants its grove back, it needs to completely re-visit its pricing strategy.
Blockbuster is going out of business…
I agree with most of the other comments. DVD’s may be a slowly melting glacier, but in-store DVD rental is melting a whole lot faster than DVD rentals as a whole. To dismiss Neflix [and Redbox] as serious competition is delusional…
Check out the article to see the growing list of comments.
Other parts of the interview show that Keyes thinks the future is “in-store digital downloads”. So, he wants people to come back to his stores to put their little memory card in his kiosk and download their movies, then go back home to watch them. Isn’t there an extra step in their somewhere?
Really, if non-streaming digital movies is coming to kiosks, isn’t more likely that Redbox – with over 11,000 locations and growing – would be a better choice? How many of you have a Blockbuster store closer to you than a Redbox? I think I know the answer, as I have to pass by at least 5 Redbox kiosks to get to my nearest Blockbuster store, which is only 2 miles away.
So what is the point of this post? If Blockbuster execs really think like Keyes has spoken here, I think many investors are about to jump off Blockbuster’s Titanic before it’s too late.
What do you think?