Blockbuster won’t survive next year.
Written by Free Audio Books - Free audiobooks on December 10, 2009 – 8:35 pm -Video rental icon Blockbuster is a great example of how technological change can crush winners that fail to keep up. First Blockbuster (BBI, news, msgs) got hammered as video rentals began moving to mail distribution pioneered by Netflix (NFLX, news, msgs). (That led me to write “Is Blockbuster doomed?” way back in 2003. The stock has fallen from around $20 a share that year to less than a buck recently.)
Now video distribution is shifting to the Internet, and Blockbuster is lagging again. “The amount of content you can download directly will make Blockbuster obsolete,” predicts Strata Capital’s Stevens.
Two big problems for Blockbuster: It’s losing lots of money and has a big debt load — nearly $1 billion in debt on top of a market capitalization of just $122 million. It’s going up against more financially sound competitors in online distribution such as Netflix, Apple, Amazon.com (AMZN, news, msgs), Google, Hulu and cable companies that are expanding video-on-demand offerings.
Blockbuster responds that it has a competitive digital platform that complements its distribution via kiosks, mail and traditional stores, letting it meet the needs of customers no matter how they want to get their videos.
It seems to me, though, that technology has doomed Blockbuster as we know it. But at least we can all say goodbye to late fees, forever. MSN
Tags: Blockbuster
Posted in Entertainment | 1 Comment »
By Paul Pastore on Dec 12, 2009 | Reply
MSN,
I have been in the video rental business since 1980, and over 20 years with a Blockbuster Franchisee. You may be right that BBV is nothing more than a white dinosaur, but before you kiss us goodbye, you should get down on your knees and kiss our feet. If it weren’t for the large video dealers like Blockbuster in the 80s and 90s, the film industry has we know it today would never have existed.
Paul Pastore