Bankruptcy for Blockbuster?
 

Will Blockbuster Go Belly-Up?

Their challenge won't be going in to bankruptcy, it'll be coming out. With a business model ravaged by online and mail-order providers, and distributors wanting pre-recession pricing for their product, and commercial paper still obscenely difficult to get, the Blockbuster team may find themselves in Circuit City's shoes.

Weren't they (blockbuster) trying to merge with Circuit City before CC went belly up... guess that's ONE way to join up...

I think they are toast. The current business model is dead. Netflix is so far ahead of the game, I'm not sure they would be able to secure enough funding to effectively compete, thus a bad investment.

Sad as it is... I'm sure that we are all going to see yet one more empty space in our local shopping centers.

Netflix is the way to go. Conserves fuel and helps subsidise the US Postal Service thru thier shipping process. Plus Blockbuster's rental fees are too expensive.

I was a Hollywood video customer until they bumped their rates by .50... yep, FIFTY cents... but that bump from $4 to $4.50 was enough to make me take another look at Netflix... for the price of two rentals, I get as many DVD's as I can watch and return in a month...

AND they have a huge and growing library of immediately downloadable movies/shows/etc., which my kids are thrilled with, and are quite workable over FiOS (although my wireless network is a bit strained...). Instead of going to a store, I just boot the computer I bought cheap on eBay for the kids to play some games on the big screen... hop onto Netflix and peruse a wide selection of movies, click and go! The popcorn isn't even done before the movie starts!

Sure, the audio doesn't seem to be 5.1 (have to look into that, maybe I can rig it up somehow, but...), and sometimes the picture quality isn't quite as good as a DVD (they adjust to fit your available bandwidth - there's that wireless issue again...), but to entertain the kids (and often the adults too, with many "classic" movies from my youth available, and fun to watch again, though I'd NEVER pay to rent them!), let's just say I havent' set foot in a video store in a while... and not spent ANY money with Blockbuster or Hollywood Video...

Oh, and did I mention an HV automated system calls regularly and Blockbuster has started to send emails... they are trying to figure out where I went... they want me back... but they are clueless to the changing tide.

My daughter gave me a Netflix subscription as a Christmas present in 2007; I cancelled when it ran out. Problem is, I am way too impulsive to plan what I want to watch even a couple days in advance. So the disks just sat around the house and days became months. I guess the online approach is the way to go, but I'm not really motivated to sign up for that and get the box to connect to the TV set. I stopped going to Blockbuster a number of years ago, and anymore I just buy DVD's or BluRay disks when I find a good price on something I really like.

Blockbuster closed the week at $0.38/share... dropped about 16% today. Doesn't look very promising for them...

I think the last time I rented a movie, Mrs. Thatcher was still living at #10.

Forecasting who can stay and who's going under today is more than difficult. The global economic reality has changed. Many of the old rules don't apply anymore. There was one respected pundit on CNBC today who said that if the Dow doesn't find support at 6,000, the next stop is 4,000! Scary stuff.

For Blockbuster, and for any company out there that provides an ongoing service, the key is to do everything reasonably possible to hang onto their customer base and cut costs, but not service. Do that for the next twelve months and you might have a shot.

And even those that do a good job with pricing and customer service will have it tough if they don't have a stash of cash or REAL cashflow inbound. A business model that is flawed or a couple bad business decisions, and you're OUT of business in this economy.

Renting videos when someone else sends them right to the customers door (and no late fees), is a tough sell...

And Boyd - one trick is to use the Netflix Queue - you can line up all the "impulse" movies you might want to see sometime, and either they come up on the "watch instant" list sometimes (been getting very lucky with that lately!), or they just show up as you return DVDs.

I actually rigged up my old laptop recently with some long cables to the TV in the bedroom, now I can fall asleep to a bad movie of my choice anytime for free!