It seems the buzzards might be circling a little lower over once-mighty Blockbuster, whose third-quarter results revealed a massive hemorrhaging of both dollars and customers. The nation’s largest video rental company has revealed that its revenues sank 24% this last quarter, a steeper drop than investors were anticipating. Additionally, same-store sales declined at double the expected amount.
“These things are going to take awhile. These things are basically on trial purposes. . . Give us time. Sorry I can’t give you much color.”
Time, however, may not be on Blockbuster’s side as it continues to lose customers to Redbox, Netflix and an ever-more-competitive VOD environment. Wedbush Morgan analyst Edward Woo echoed this sentiment, singling out Netflix as a content provider prospering at Blockbuster’s expense:
“Netflix is growing really well in a bad economy — the same economy Blockbuster is facing. . . You have to wonder how much more patience investors will have.”
Blockbuster, which has spent much of the past year refinancing its debt and raising capital, plans to increase its advertising spending and stock more copies of popular new releases. It also plans to massively expand its Blockbuster Express kiosk network with partner NCR.
Are the wolves at the door, Insiders, or can Blockbuster find its way back into the black? Give us your Blockbuster prognostications in the comments.