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Blockbuster Not Quite History Yet?

We spend a fair amount of time on this site chronicling the seemingly eternal downward spiral of Blockbuster Video. The nation’s largest video rental chain (at least for now) is increasingly perceived by consumers and investors alike as an anachronistic dinosaur from another time, destined for obsolescence and extinction as surely as the terrible lizards of the Mesozoic.

Despite all the gloom that seems to perpetually surround the BB name, there are a few who feel that some hope—however slight—may yet remain for the once mighty company.

The Motley Fool has put forth the following reasons why it might be a bit premature to write off Blockbuster completely:

  • Coinstar’s Redbox kiosks and Netflix home-delivered flicks have eaten away at Blockbuster’s value proposition, but those two growing companies have recently agreed to release window delays. In short, Blockbuster will be the only of the three to nab a rental of Time Warner’s The Blind Side next month when it first comes out.
  • Blockbuster began testing video game rentals by mail in Cleveland and Seattle last year. This is a market that Netflix has steadfastly avoided and one where the runaway champ — GameFly — is profitable with a mere 334,000 subscribers.
  • Smaller rental chains have gone out of business, so Blockbuster is becoming the manned real-world flick renter of last resort.
  • Blockbuster Express is the chain’s response to Redbox. The automated kiosks aren’t holding Blockbuster back financially, since machine-maker NCR is bankrolling the rollout.

What do you make of these arguments, Insiders? Will these or any other variables prevent the Blockbuster name from fossilization? Sound off in the comments.

(via The Motley Fool)

35 Responses to “Blockbuster Not Quite History Yet?”

  1. Visitor [Join Now]
    FooBar [visitor]

    My response to the bullet points:

    – Warner is not the only movie studio out there
    – Redbox also testing video games
    – Key word: “last resort”, I would not want to be a company that people shop at as a last resort
    -“The automated kiosks aren’t holding Blockbuster back financially”. In other words, BBexpress machines do not earn much if any revenue for BB(except for branding).

    So, nothing to support growth in Blockbuster

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      Shut everything down and license the brand.

      • Member [Join Now]
        Cypherdude [cypherdude]

        I agree with the article that Blockbuster will be the only major chain which will benefit because BB didn’t agree to this ridiculous “28 day window.” Netflix and Redbox will suffer because they caved. Expect BB online’s old customers to slowly return when they realize they must wait for new releases. I have already canceled my Netflix account.

        • Visitor [Join Now]
          slidecage [visitor]

          If blockbuster was smart they would do an online program but lower the cost ..

          2 at a time for 21.95 (instead of 29.99) or 3 at a time for 29.99

          To know i can flip movies every day (60 movies for 22 bucks) is a very good deal.. even at 60 movies for 30 bucks per month would be a good deal if i had a blockbuster i went past daily

          I dont and it cost me almost 2 bucks per day to drive there

          • Visitor [Join Now]
            Richard [visitor]

            Blockbuster offers subscriber online services for about the same as netflix, plus the option to exchange in the store. I have had netflix, the service for blockbuster online is the same price, plus I can run to the store to exchange for a new release on bluray for no extra charge, which netflix doesn’t offer. The last few times I got releases from older netflix boxes I held my breath when the machine sucked them in. I have gotten two at a time spit out through the opening before. So far out of the three I like Blockbuster. I was in the store on Valentines weekend and I had to wait in line, something I haven’t seen for quite awhile. This is a huge market and I think there is room for more than Netflix and Redbox. Just like you have McDonalds, Jack in the box, Wendys, Arbys, etc. I hope they all do well.

  2. Visitor [Join Now]
    Drew [visitor]

    I still think Blockbuster will go the way of the dodo bird. Video game rental market isn’t large enough to save them. They are too late into the kiosk market (don’t they really just lease their name to that)? And the Blockbuster kiosks don’t allow for viewing inventory and making reservations online at a particular machine. For me, that’s a dealbreaker! I won’t use them without that feature.

    The 28 day delay is just not enough to convince me to go to Blockbuster and pay more for the movie. It matters not to me when I see a new release that I want to see. If I have to wait four or five weeks later after its initial release date, that matters to me not one bit!

    Just my two cents!

    Blockbuster is now the only video rental place left here in Mount Airy, NC save a Movie Gallery getting ready to board up its doors. Cruise by Lowes Foods with a Redbox inside on a Friday or Saturday night and you’ll see a line of folks at the Redbox while a drive thru Blockbuster’s parking lot and you’ll see a couple of employee cars and maybe one or two customers who can’t get a credit or debit card! Farewell Blockbuster!

    • Member [Join Now]
      jsj

      In my area BB express just started online view of inventory and reservations but still can’t return it any where. But they do let you use promo codes online when you reserve a movie.

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      Is the size of the line a problem in your opinion? Does it move pretty fast generally speaking? Just wondering if that is a big issue.

      • Visitor [Join Now]
        Drew [visitor]

        The size of the line thus far hasn’t seemed to be an issue. It seems like usually a couple of folks or so will be returns only. Most folks in front of them seem courteous and allow folks with returns only to go ahead. And I guess peer pressure keeps folks from spending long times in browse mode when a line is behind them. Always seems to move pretty quickly.

    • Visitor [Join Now]
      Jake [visitor]

      All this seems to be based on cost… which I think is BlockBuster’s biggest downfall. Some of this is just that they have more overhead (stores to keep heated, employees to pay), but not all of it. Around here there’s a chain called Family Video that has the same overhead issues, but much lower rental prices. So I’ve gotta believe that part of the problem is simply that BlockBuster has overvalued their brand. They think people will want to come to their stores simply because of the name. They seem to be realizing that this isn’t true and that they have to actually compete. I’d really expect that we’ll start seeing the rental prices at BB drop.

      If BlockBuster could get their rental price down to $1/night, would there really be any advantage to standing outside on a cold winter night at a Redbox outside Walgreens vs going down the road a little bit to BlockBuster and browsing their inventory inside a nice heated building where you can walk past shelves lined with movies you may be interested in (at the same time as other patrons, I might add)?

  3. Member [Join Now]
    jsj

    Now that BBexpress has online resevation at there kiosks machine and the only ones with no 28day delay. It’s only time till they start cutting into redbox’s customers. Only draw back is the lack of kiosks and you must return the rental to the kiosks that you rented from. I never though I would deal with BB again after redbox and netflix but I guess a good things never last.

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      That stinks that BBI express can’t figure out yet how to allow returns from anywhere. A pretty big % of redbox’s returns come from a different unit.

      Overall I wouldn’t trust BBI’s efforts at kiosks to be any better than their initially lower than netflix priced 3 out plan that failed miserably. BBI knows stores – not kiosks or subscription plans.

    • Member [Join Now]
      randykc

      Do you have to return the rental to the same kiosk? I’m looking at the terms on their we bsite and it says – A BBExpress rental item may be returned to any BBExpress vending machine. I have only returned them to the same machine so I don’t know.

      • Visitor [Join Now]
        Tom [visitor]

        I almost always return BB movies to a different kiosk. I go to the closest, most convenient one. I have never heard of having to go to the same one to rent and return.

  4. Visitor [Join Now]
    John Small [visitor]

    BB still needs a chance to file Chapter 11 so that they can get out from under their unprofitable leases. After that they will do a lot better. May happen this year, we’ll see.

  5. Visitor [Join Now]
    slidecage [visitor]

    I still do not see why Netflix and gamefly do not do a deal with one another ..but i doubt netflix needs the headache ..

  6. Member [Join Now]
    MovieWatcherSupreme [moviewatchersupreme]

    It really seems that BB’s kiosks are their final hope. If I was a company, I wouldn’t risk investing in BB. Are they dead? no. Are they dieing? I think so – slowly. All kinds of things (such as red box) are contributing to this downfall that is being seen and is mentioned in the article.

  7. Visitor [Join Now]
    1st Rule Of Business [visitor]

    Never be all things to all people in business.

    It’s smarter to do a few things very well than a lot of things moderately well.

    Blockbuster, due to its dying business model, has continually tried to do all things for all people. It’s a flawed business model since they can’t compete significantly on any level. Shoot, I have heard they only way NCR was able to get into the kiosk business is because they paid silly fees to their retail parties. These fees were so silly Redbox was willing to walk away from the business.

    Blockbuster is done.

    That’s a fact.

  8. Visitor [Join Now]
    john sfrengeu [visitor]

    im thinking of investing about $1,000 in blockbuster. If i loose it no big deal I made the money in the market anyways. The reason I’m even considering investing is Blockbuster will be the only place to rent the physical DVD from. So it will help them make a profit or at least loss less money.

  9. Member [Join Now]
    h0mi

    Blockbuster offers a lot of different, kind of competing services. They could easily be a 1 stop shop for movie rentals if I could rent a disc via mail, swap it in store for a movie on, say an SD card, get my next disc in the mail, swap it at a kiosk on a trip to the supermarket and do all this for a ~$10/month price. At the least, allow blockbuster online returns at kiosks, and offer a monthly movie streaming service instead of just VOD. They’re taking too long to do this, and while they’re dragging their feet, netflix is growing (and IMO will be largely unaffected by the 4 week window) as is Redbox (which IMO will continue to grow as consumers realize they flocked to redbox for the convenience, not so much for “brand new” releases).

    Their download service needs to be on more hardware, like how Netflix has partnered with everyone.

    That said… blockbuster also has a lot of bad blood with customers. People remember their censorship of movies (renting only edited versions) or other consumer unfriendly tendencies over the last decade or so (running mom & pop shops out of business, late fees… it’s a lot to try to overcome.

  10. Visitor [Join Now]
    mary [visitor]

    We have BB express here in Tampa and we can return to any kiosk, but Publix is the main location for them, which limits the time to open store hours as they are located in the store.

  11. Visitor [Join Now]
    Rick Roth [visitor]

    Frankly they are about to feel the wrath of God and they above all others deserve it for seeking to play God with the public for all these years. Their editing of films from day one to try to make the public share their sense of morality without letting the renter know they were doing it has been one of the most obnoxious controlling efforts ever been put forward by a fanatical religious power and the only one I think of that has lacked the fortitude to claim it’s actions. The Lord moves in mysterious ways, but yet again is about to display his omniscience and omnipotence. Good riddance to BB.

  12. Visitor [Join Now]
    Hydroponic Closet [visitor]

    Pretty cool post – raises some interesting points for debate. I just stumbled upon your blog this morning and wanted to say that I have really liked browsing some of the posts. Anyways, I’m subscribed to your feed and I hope to read more very soon!