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Tical3.0 View Drop Down
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    Posted: 22 September 2010 at 1:49pm
Bankrupt, heh heh heh.

"

A Small Glimpse Into Why Blockbuster Can Not Make It Work

By DOROTHY POMERANTZ
A Blockbuster location in Moncton

Image via Wikipedia

The Wall Street Journal is reporting today that Blockbuster will declare bankruptcy later this week. The company is drowning in $900 million in debt. For the first half of the year Blockbuster reported a $136 million net loss, compared to a $15 million loss a year ago. Rental revenues were down 17% to $1.1 billion and overall revenues (including sales) were down 16% to $1.7 billion.

As smaller video stores collapsed over the years, Blockbuster had remained a stalwart presence in many mini malls. But with the growth of things like Netflix, Redbox and video on demand, the 5,800-store chain now seems like a dinosaur.

But with such a strong brand name, why couldnít Blockbuster keep up? I got a glimpse of some of the problems last week when I went to rent Oliver Stoneís original Wall Street in preparation for an interview with the director.

My local store said they had two copies but both were out at the moment. In fact one seemed to be lost and the other had been out for over a week. The clerk said that it looked like the film had been rented by someone using Blockbusterís new Total Access program which allows you to rent movies by mail (a la Netflix) and return them in stores in exchange for free rentals with no due dates or late fees. (I had wasted many hours with my kids this summer listening to the Blockbuster folks pitch this plan to other people in line.) So the companyís new initiative was bleeding the store of inventory.

I asked if I could put my name down so they could call me in case it came back because I had a few days before the interview. The clerk said they didnít do that.

I went home and easily found the movie available for instant viewing on Netflix and watched it on my computer. I would have much preferred to watch the disc on my big screen television but beggars canít be choosers.

The store did run an excellent promotion this summer where you could take out kids movies for $1 per film and keep each for five days. But almost inevitably the discs were scratched and unwatchable because the store didnít care much about its inventory and I finally even gave up on that.

Between the lost and scratched films, it seems like customer service in the stores (the one thing Blockbuster could have still bragged about as itís the only place where you can rent movies from an actual human being) has completely fallen by the wayside.

As soon as the new AppleTV hits stores, Iím tearing up my Blockbuster card in favor of Netflix instant streaming (which Iíll be able to play on my TV) and iTunes rentals. Whatever the headaches that arise from those technologies, theyíre sure to be less stressful than going to Blockbuster.

According to the Journal, Blockbuster is not going to disappear completely. A deal with senior creditors should wipe out the companyís debt and allow it to restructure which will mean fewer stores and, potentially, a larger online presence. It could help the company make a comeback  but thereís a good chance it could all be too little too late."




Can't say I didn't see this coming.

Thoughts?



Edited by Tical3.0 - 22 September 2010 at 1:51pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote GI JOES SON Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 2:07pm
it was only a matter of time, they couldn't keep up with the new technology and are paying the cost...if they had been on the ball maybe it would have been called blockbuster-flix that you can stream to your tv these days. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote SSOK Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 3:12pm
Blockbuster had potential.
 
A la, Netflix without waiting.
 
However, their customer service has, and always will be, horrible.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Benjichang Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 3:19pm
If a company can't adapt to a changing marketplace, they will ultimately fail in the end.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote usafpilot07 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 3:37pm
Redbox is going to take over the world.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote agentwhale007 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 3:42pm
I've got the Blockbuster mail-in thing, as I liked the in-store exchange process back when I actually lived within four hours of a Blockbuster.

They could feasibly save themselves by shedding the stores (And the overhead that goes along with it) and try and compete with Netflix head-to-head.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Tical3.0 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 3:48pm
I just can't wait until the BB by my house starts selling everything off super cheap. Time to update my movie collection.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tallen702 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 4:31pm
Even with a restructure, BB won't be able to make a comeback. Not only is netflix ahead of them on the dvd by mail thing, but they already have themselves entrenched in the console and PC market for streaming video. Furthermore, BB doesn't currently have the ability to stream as far as I know, and that means costly buy-ins to console and stand-alone markets.

I've seen this coming since back in '04 when they started their "by mail" service in an attempt to compete with netflix. They didn't push it nearly as hard as they should have, and that is what cost them in the end.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote agentwhale007 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 4:49pm
But does Netflix have video games? I honestly don't know.

That was why I picked Blockbuster, other than the store return thing.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kickinwing2010 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 5:35pm
I have a friend who's mom works at blockbuster as a manager, she told us sometime last year that it wasn't going good for them and she told us about downsizing they were doing.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote jmac3 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 5:36pm
Blockbuster sent me a collections notice..for a $20 late fee. It was only two weeks after I incurred said late fees that I got the letter.

I said "haha bankruptcy"

EDIT: And by Blockbuster I meant collection company people.


Edited by jmac3 - 22 September 2010 at 5:37pm
Que pasa?


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Post Options Post Options   Thanks (0) Thanks(0)   Quote carl_the_sniper Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 5:48pm
Saw it coming as soon as the got rid of the "no late fees" thing.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tallen702 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 6:21pm
Originally posted by agentwhale007 agentwhale007 wrote:

But does Netflix have video games? I honestly don't know. That was why I picked Blockbuster, other than the store return thing.


Gamefly is Netflix's video-game arm.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote PAINTBALL1 Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 8:20pm
Originally posted by Tical3.0 Tical3.0 wrote:

I just can't wait until the BB by my house starts selling everything off super cheap. Time to update my movie collection.


The Movie Gallery in town went out a couple months ago. I was picking up Blu-Rays for like $3 and DVDs for around $1. I also bought a few 360 games for $4, needless to say, it was a good day. I wished I would have known about the sale sooner, instead of stumbling upong it on the last day.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RoboCop Quote  Post ReplyReply Direct Link To This Post Posted: 22 September 2010 at 10:07pm
Blockbuster has some of those Redbox booths at certain stores. It's just like the Redbox, but instead it says Blockbuster. They are late on the times, and I haven't visited a blockbuster in years.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote FreeEnterprise Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2010 at 10:31am
A friend of mine owns the patent for the mailing device used for mailing cd/dvd's through the mail according to postal regulations.
 
Netflix did not use it, instead made their own mailer, that did not fall inside the government regulations on postal requirments.
 
 
 
 
 
But, netflix got special treatment from the post office including hand cancelling a majority of the mailers. (a HUGE cost to the post office, which was just passed on to the tax payer with the new added postage costs). Yeah, we are all paying netflix's extra postage each time we mail something.
 
 
They have not redesigned, and the post office is still not machine processing these mailers. At a MASSIVE cost to the post office, and you and me, as we pay for it in higher postage costs. Did you know that for every penny in postage cost increase, direct mail drops by 4%.
 
Costing printers in this country a huge loss of business, all so netflix can get special treatment.
 
 
Blockbuster used the proper mailing device, and since it cost more to follow regulations... It hurt their bottom line, and because they didn't get the service netflix got... It took longer in the mail as well.
 
So they paid twice as much, for worse service from the Post office. Typical move from the government...
 
 
 
 
Bankruptcy just means they will try and fix their 900 million in bad debt, it doesn't mean they will go out of business for sure... I think they will stay around as their brand is pretty strong. They will for sure end up closing a bunch of stores, but some of their stores are quite profitable... And lots of people still rent movies... I read an interesting article about how the online business (which is run separate from the brick and mortar business btw) was hurting their inventory at the stores...
 
 


Edited by FreeEnterprise - 23 September 2010 at 10:34am
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Post Options Post Options   Thanks (0) Thanks(0)   Quote oldsoldier Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2010 at 10:38am
Going the way of the 8-track and Betamax, adapt or die. We have had Netflix forever, Blockbuster is too far behind the power curve to make it, they are done, Berlin Apr 45 the dream reconstruction and take over of the video market, are just another fantasy of a dieing empire.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote usafpilot07 Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2010 at 11:12am
Originally posted by oldsoldier oldsoldier wrote:

Going the way of the 8-track and Betamax, adapt or die. We have had Netflix forever, Blockbuster is too far behind the power curve to make it, they are done, Berlin Apr 45 the dream reconstruction and take over of the video market, are just another fantasy of a dieing empire.


They do have Redbox style boxes in some places though, which I would think are even stronger than the Netflix type deals.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote GroupB Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2010 at 11:21am
The one here that is having the going out of business sale is selling used DVDs and Blurays for $10 each.  They can't even go out of business well. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote agentwhale007 Quote  Post ReplyReply Direct Link To This Post Posted: 23 September 2010 at 11:39am
Originally posted by oldsoldier oldsoldier wrote:

Berlin Apr 45 the dream reconstruction and take over of the video market, are just another fantasy of a dieing empire.


I've never seen anyone Godwin a movie rental thread before.

Originally posted by FreeEnterprise FreeEnterprise wrote:

Typical move from the government...


This truly is Obama's Katrina.
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