CNET’s Don Reisinger posted a blog today about how we all should “say goodbye to Blockbuster.”
“According to the company’s third-quarter results released Thursday, Blockbuster’s revenue slid 5.7 percent and the company harbored a net loss of $35 million. Worse, it has closed 526 stores in the past year, and the number of employees will be reduced to offset high overhead costs to the tune of $45 million. Blockbuster’s injured stock price continues to fall and was priced at $5.06 at Thursday’s close.”
At one point, Blockbuster offered twice as many movies as Netflix per year for the exact same price. With the “Total Access” plan, Blockbuster customers were allowed a certain number of free in-store rentals, an offering Netflix couldn’t compete with do to a lack of retail store fronts. However, that all changed when Blockbuster upped “Total Access” prices. This left many consumers wondering what other sneaky changes Blockbuster had in store for them down the road. The rocky business model forced many customers to turn to Netflix.
While I do agree with Reisinger’s post, I don’t think all is lost for Blockbuster. People simply don’t want to have to travel to a store to seek out a movie when a cheaper and more convenient option is available. Blockbuster needs to re-evaluate their business model to better compete with internet-only store fronts. Perhaps we could see a partnership with Apple’s iTunes to deliver downloadable rental content? Part of what’s keeping me from buying movies on iTunes is their rather high prices when I can get a physical DVD copy for a similar price (not to mention the plethora of torrents available as well). While I don’t know the ins and outs of copyright law, it would seem as though Blockbuster would have more experience in that field than Apple would alone. In addition, they already have a partnership with with TiVo. An iTunes partnership would also force competition with Amazon’s Unbox service that already offers movie rentals.
Blockbuster stock fell to $4.81 per share at close today.