Also note that this article is from 2005. BBI's market cap is now $122 million while Netflix's is $3.24 BILLION. Stick a fork in Blockbuster--they're done.
Is Blockbuster going out of business?
- Thread starter PKerr
- Start date
Also note that this article is from 2005. BBI's market cap is now $122 million while Netflix's is $3.24 BILLION. Stick a fork in Blockbuster--they're done.
Thanks for posting this.
I saw a guy in my neighborhood earlier this week hold a 'Store Closing' sign. Interesting to hear it's a widespread situation.
Exactly.
Their current model has ridiculously high overheads for what they actually do. It doesn't take a rocket scientist to figure out that they're losing money hand over fist. It's completely inefficient.
Kind of sucks. Netflix is great, but it lacks the ability to instantly pick up movies when you want to see them. All blockbuster had to do was get their mail service anywhere close to netflix, and the ability to pick up videos at physical shops might have been enough to sway people. Without BB, we might see an increase in netflix prices. Actually the whole reason why I quit netflix was because they upped their blu-ray prices again. All Netflix needs to do to instantly kill off BB is to open up redbox like kiosks that are tied to your netflix account.
I used to work for Blockbuster competion and they are going through the same thing. Closing stores, downsizing, lean and mean... what ever the positive spin is.Its a changing world and brick and morter is dying. Neither company was forward thinking and dismissed mailed order, online, downloading and kiosks as fads and no threat. I give it two to three years.
Blockbuster did that to take away Netflix uses, it worked, Netflix lowered their prices. Then within 2 months BB got rid of that! Incredibly stupid!
BB Online will still be around, same with the boxes, the stores are fucked.
I went on Halloween and the used DVD prices for movies was something like $13, I could get 90% of the movies in there for cheaper new.
I think the traditional brick and mortar stores are going the way of the dodo, but the blockbuster name will live on through more a redbox type model.
It's been years since I have rented anything from Blockbuster so I have nothing against them, but it seems to me there demise is more akin to the makers of whips for horse and buggy's than bad business practices. The idea of physically going to a store and renting entertainment is quickly becoming a thing of the past. The only advantage it had was being able to rent a particular movie you wanted to see that night. Once Netflix can stream to your TV cheaply Blockbuster will be dead.
QFFT.
They are doing ok. The company is still sitting on a mess though, but they are working their way out of it. Between the mess left over from when it spun out of Viacom and the previous CEO's failures, there is a lot to clean up.
If this very situation was going on five years ago, it wouldn't have been an issue. The problem is that with the recession on right now, it's reducing business a little and making everyone all "doom and gloom".
And anyone who buys into red box is a little batty. Red box is a dollar a day. Block buster is $4.99 for a latest new release for two + seven days. As such, if you took advantage of all seven days of the grace period, it works out to $0.50 per day. Half the cost of red box on a per day basis. For slightly older new releases, it's the same 4.99 plus tax but now it's for seven + seven days. So taking full advantage of the seven day grace, you get an adverage cost per day of about $0.35. An older movie, released a year ago or longer, is $3.99 for a seven + seven, which taking the full grace works out to be around $0.30 per day.
If this very situation was going on five years ago, it wouldn't have been an issue. The problem is that with the recession on right now, it's reducing business a little and making everyone all "doom and gloom".
And anyone who buys into red box is a little batty. Red box is a dollar a day. Block buster is $4.99 for a latest new release for two + seven days. As such, if you took advantage of all seven days of the grace period, it works out to $0.50 per day. Half the cost of red box on a per day basis. For slightly older new releases, it's the same 4.99 plus tax but now it's for seven + seven days. So taking full advantage of the seven day grace, you get an adverage cost per day of about $0.35. An older movie, released a year ago or longer, is $3.99 for a seven + seven, which taking the full grace works out to be around $0.30 per day.
I'm still puzzled by the popularity of Netflix. Cheaper costs aside, unless they've developed transporter or replicator technology, I can't see how waiting a couple days fulfills the "instant gratification" a physical rental outlet provides when someone wants to see something right now, and the process of mailing the things back offers no advantage over having to travel to the video store to return them. (Unless you live in some place with no rental outlet, of course).
Also, I hope Netflix has pretty strong quality control, because when I used to rent I'd often have to return the disc to the store because it was too badly scratched to play.
Here in Canada we're not seeing Netflix have much (any?) of an impact, but the stores are starting to fade. One chain, VHQ, has closed a bunch of locations and merged with Movie Gallery, while our other two major chains, Blockbuster and Rogers, seem to be doing OK. That said, many people, myself included, buy rather than rent, especially when you can find recent releases sometimes going for $5 or even less at Wal-Mart. I rarely even buy previously viewed DVDs at the videostores anymore, after encountering a long string of scratched discs (and by that I mean down to the foil in one case). What's keeping the videostores alive in my neck of the woods are game rentals and sales of games and accessories.
I don't mind seeing Blockbuster taken down a peg or two. They've become too powerful over the years, to the point where at one time they were even starting to dictate content (Blockbuster's refusal to carry NC-17-rated movies takes part of the blame for the failure of that rating). Wal-Mart needs a good spanking too, but it's become so powerful that any sort of major downsizing could collapse local and even regional/national economies, so it might be a bit too late.
Alex
Also, I hope Netflix has pretty strong quality control, because when I used to rent I'd often have to return the disc to the store because it was too badly scratched to play.
Here in Canada we're not seeing Netflix have much (any?) of an impact, but the stores are starting to fade. One chain, VHQ, has closed a bunch of locations and merged with Movie Gallery, while our other two major chains, Blockbuster and Rogers, seem to be doing OK. That said, many people, myself included, buy rather than rent, especially when you can find recent releases sometimes going for $5 or even less at Wal-Mart. I rarely even buy previously viewed DVDs at the videostores anymore, after encountering a long string of scratched discs (and by that I mean down to the foil in one case). What's keeping the videostores alive in my neck of the woods are game rentals and sales of games and accessories.
I don't mind seeing Blockbuster taken down a peg or two. They've become too powerful over the years, to the point where at one time they were even starting to dictate content (Blockbuster's refusal to carry NC-17-rated movies takes part of the blame for the failure of that rating). Wal-Mart needs a good spanking too, but it's become so powerful that any sort of major downsizing could collapse local and even regional/national economies, so it might be a bit too late.
Alex
Netflix is getting more and more titles available for streaming. I read an article where Netflix forecast that within 5 years over half of their titles will be streaming.
I am on the 3-DVDs-at-a-time plan. I ran some numbers one day and estimated that for $18/month I am watching over 180 titles per year. This is a far cry cheaper than those thieves at Blockbuster or even the cheap, but title-lacking, Hollywood Video.
I have over 30 titles in my Netflix queue, and to date, 90% of my titles come out of the Oklahoma City facility, which is 30 miles from where I live. I have established my viewing habits so that I can view a title, mail it the next day, and that evening I should be receiving another title. With Netflix, I was able to watch the entire series of Battlestar Galactica over the month of September. If a title in my queue is not available, Netflix will send the next available title and will immediately send the "missing" title when it is available even if I'm hitting my three-out limit. I have never had an issue with a scratched or non-functioning DVD, and it is my understanding that Netflix has an error/bad DVD rate of ~1%.
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With RedBox rentals and Netflix both being so popular, not to mention VOD cable stations with new releases, yeah, it wouldn't surprise me if Blockbuster was struggling.
I'm on the 2 DVDs at a time plan with BD option. I estimate I get 6 physical DVDs/BDs a month, far fewer than John Picard and watch a ton more streaming (seen all of The Office, 30 Rock, Leverage, No Reservations, and several other series this way). With my viewing habits, it's not even a contest which option is cheaper for me.
I've been a Netflix member since 2003 and have had 2 or 3 discs I've had to return due to being scratched or unwatchable. No problems with their quality control--that's for sure.
