As if there wasn’t enough blood in the water already, Blockbuster has released its numbers for the crucial fourth quarter of last year. The results are disastrous, as anticipated. During the 2009 holiday season Blockbuster posted a quarterly net loss of nearly $435 million, compared with a net loss of nearly $360 million during the same period the previous year.
BB CEO Jim Keyes blamed his company’s woes at least in part on cheap new release DVDs sold at retailers and the workaround program of a certain kiosk vendor that uses red boxes. Said Keyes:
“In spite of the [new release delay] windows … our DVD-based competitors were successful in their ability to buy around the 30-day window restrictions by purchasing diverted product from competing retailers . . . This affected rentals in our stores.”
Keyes, while trying to do damage control, also hinted at more store closures if the rest of Hollywood doesn’t follow Warner’s lead when it comes to delaying new releases to Redbox and Netflix. Said Keyes:
“If the studios don’t go that direction … then you probably need fewer stores to be able to satisfy that demand,”
On the other hand, Keyes said, if a unified retail-only window is established by every studio, Blockbuster’s core brick-and-mortar business could remain afloat. According to Keyes:
“If that happened, you would want to keep more store[s] in operation, to enhance [our] consumer relevance . . . [A retail window] would more clearly define the use occasions for those channels.”
How much longer can this last, Insiders? Can Keyes’ dream of a universal Hollywood delay window come true in time to save Blockbuster? Will spinning off assets or pushing into the mobile sphere bootstrap BB into financial solvency?
(via Home Media Magazine)