Like a video store version of The Little Engine That Could (which was also blue, come to think of it) Blockbuster keeps on keepin’ on despite massive debt and dwindling market share. Fast Company recently interviewed CEO Jim Keyes and got his take on BB’s “remodeling” plans, its rivalry with Redbox and Netflix, and the company’s intention to avoid bankruptcy. Here are some highlights:
Keyes on Blockbuster’s efforts to turn its fortunes around through multiple distribution channels.
“How does [our multi-channel platform] not work? Look, we are completely rebuilding house from scratch, and we’re living in the house! You might think, This looks terrible! Well, yes, no kidding! We’re in the middle of remodeling. But what we’re modeling is a house with a garden, and a studio, and a media room–and I’m out there saying, Listen, wait until we finish, but this is going to be really unique. It’s different than the other house–why wouldn’t you want to live here?
Call me brash, but we’re building a world-class cross-channel distribution platform. Netflix can’t deliver content the way we can. Redbox can’t do what we do in their vending machines.”
Keyes on Blockbuster’s 28-day new release window advantage over Netflix and Redbox.
“How often does a company get a material, tangible point of differentiation? If 60% of the demand for movies is in the first 28 days, and we now are the only national chain able to offer this advantage by mail, online, and in-store–look, it’s a very compelling advantage for mainstream customers. Not for Netflix’s customer, who is that longer-tail customer. If you want Avatar, you are not going to get it on Netflix in a timely basis. I don’t at all mean to poke any negatives at Netflix. I think they do a terrific job–at what they do.
Keyes on Blockbuster’s intention to avoid bankruptcy.
“[Going bankrupt] is not our intention. Our objective is to manage a very challenging liquidity environment. We’re doing a lot of things at the same time, and we have to spend a lot of money to build our future. What we couldn’t have anticipated was a complete financial meltdown in 2009.”
Keyes (sort of) admitting that customer attrition also contributed to BB’s downfall, along with the recession.
“Yes, of course we did [lose some customers to Netflix]. We lost some to Redbox too. We were sitting on 45% of the market. Anyone with that much market share is vulnerable to new competitors. But people forget we’re still sitting on a base of 50 to 60 million customers.”
(via Fast Company)