Posted on 01/02/2005 11:07:50 AM PST by MississippiMasterpiece
It's quite an epic, watching Blockbuster die.
The nation's No. 1 video chain hopes to prolong its life with a hostile bid for the No. 2 video-store chain, Hollywood Entertainment. But make no mistake - it's dying. The whole video- store industry is dying, too. Meanwhile some high-rolling financiers are picking over the corpses.
Renegade capitalist Carl Icahn has emerged as the largest investor in both Texas-based Blockbuster and Oregon- based Hollywood. Icahn is trying to put the chains together in a $1 billion deal. He'll most likely try to turn a fast buck with synergies, economies of scale, cost- cutting, restructurings, refinancings and perhaps a little bit of that old-time merger accounting.
Before Icahn's move, Leonard Green & Partners, a storied California-based investment group, bid for Hollywood. The firm, however, lowered its offer after having a close look at the books.
Alabama-based Movie Gallery, the No. 3 chain, also made an offer for Hollywood. So now, there's a testy little auction - replete with hostile takeover threats - making regular headlines.
The truth is that combining Hollywood with any other video-store chain is like handcuffing two drunks together. They could prop up each other for a while, but they are bound to stumble.
This is why entertainment giant Viacom divested itself of Blockbuster in October. Viacom's brass said they believed Blockbuster would be better off on its own. What they meant was that Viacom would be better off without Blockbuster.
Shortly after the spinoff, Blockbuster took a $1.5 billion charge against earnings to account for its declining value. As a result, Blockbuster posted a $1.26 billion loss on $4.33 billion in revenues for the first nine months of 2004.
To be sure, Blockbuster, Hollywood and other video stores still throw off plenty of cash and have seized video games as a new source of revenue. But their glory days are long behind them.
One reason they are still alive is because cable and satellite providers have failed to deliver a respectable array of competitively priced pay-per-view choices.
Another reason is that movie studios have propped up video stores as cash cows. Studios send their movies to theaters, then video retailers, and then to TV outlets. The window when new releases were only available in video stores gave Blockbuster its appeal.
But movie studios have learned they can make more money by flooding the market with inexpensive DVDs for sale at the same time they release them to video stores for rent.
That gives consumers an intriguing choice: Why pay $4 to rent when you can buy for $12 to $20 and not worry about pesky late charges while building up a personal video library?
Cheap, lightweight DVDs are easily mailed, too. This feature gave rise to Netflix, which pioneered the online, mail-order subscription model. Unfortunately, this idea is so widely copied - by Wal-Mart, Blockbuster and soon even Amazon.com - that Netflix's days are also numbered.
Meanwhile, McDonald's is experimenting in Denver with kiosks that dispense rental DVDs for $1 in a bid to drive traffic to their food counters. Supermarkets, pharmacies, convenience stores and bookstores also sell or rent DVDs for the same reason.
Then there's TiVo and other digital video recorders, including ones from Comcast and EchoStar. Why suffer long lines and slow-witted clerks at Blockbuster when you can record what you want from TV and fast-forward through commercials?
Just before Christmas, Blockbuster said it would lower its monthly fee from $17.49 to $14.99 for its Netflix-like service. That announcement came shortly after Blockbuster said it would cut late fees for in-store rentals. Blockbuster said it expects to lose income of between $250 million and $300 million for 2005 as a result of eliminating late fees.
Imagine that. Taking a quarter-billion dollars a year from customers who are too busy, too lazy or too forgetful to return their videos. This is a business model that deserves to die.
Or the HERE channel. LMAO
So you haven't heard of Ray? Or Sideways? How about The Incredibles? Did you see Road to Perdition?
You're missing a lot; in between the dreck, there are still fine films.
That sums it up. Millions of people have decided that is the solution. They no longer from Blockbuster or they no longer rent at all.
The choice these people are making will also soon effect those who return the product on time. There will be no Blockbuster to rent from.
Our family rented 3 movies over the Thanksgiving holiday weekend at Hollywood video, each one of them had advertising on them the moment the DVD started the disc. On all three discs, the DVD players FFWD control was disabled, so we muted the TV and visited until the title disc title screen came up.
The latest Bloickbuster ads portay people as a bunch of WHINERS. Boohoo. No more late fees! No more late fees!
Just because you're either too laxy or too incompentent to follow rules -- rules you knew of and agreed to ahead of time -- doesn't make the rules wrong. I am a CPA. I play by the rules and I get frosted beyond all belief when people CRY that 'It's so unfair!'. Follow the rules or don't b**ch. I don't have any compassion (or any more time) for people like you.
Yeah they had dumb policies. I kind of understand them, since some movies are in greater demand the longer you hold it the less money they can make off it. It was just business. But, I didn't like it either. I don't like their stores. Their stores are a waste. Big stores, big shelves, but they stock the shelves wide instead of narrow - meaning, very little inventory. For first run movies it worked, but if you wanted to rent Kubrik's Paths of Glory - you'd never find it at any Blockbuster. I just recorded Killer's Kiss - a movie that is hard to find - on my ReplayTV unit. It was on at 4 am last week - so no, I didn't stay up to watch it, the machine captured it and I will watch it at my convenience. Same with Stone Cold - a fun, campy movie. I don't think it's even available on DVD. But it's on my personal DVR!
The advertisement issue at the beginning of the disc varies by studio. I know Disney and Universal are known for it. Paramount and Dreamworks usually don't.
I don't recall ever seeing ads or promo's on a Netflix rental. Okay... some have theatrical trailers as a special feature but they don't play automatically.
"Just because you're either too laxy or too incompentent to follow rules..."
Do you work at BB?
Those rules at BB are what is doing them in. Do you know that BB made 250 mil in revenue each from late fees? BB now needs to figure out where that revenue will come from instead.
BB just ain't gonna survive because of the myriad of other issues raised in this thread.
One was a Dreamworks Studio movie, so you're correct, Dreamworks usually doesn't, but in this case they did.
Glad you liked it.
"Glad you liked it."
Well it appears I wasn't the only one.
which Dreamworks title was it?
I'm guessing there are only so many watchable movies, and after a decade or so most people will have seen all they want to, or own the ones they really like.
The remainder aren't going to sell at $20 or even $12. Nor will they rent at $4.00.
I picked up a bunch of old (30s and 40s) mysteries at the grocery store -- four on one DVD for $8.00. That's about the right price. Bad movies are currently selling for $5.00 at WalMart. I can see all DVDs selling for under $8.00, probably less.
In five years there will be a market for High-Definition, but I think it will take ten years for most people to have suitable displays.
And then there will still be BB pushing the VHS format when the DVD HD format out there in the mainstream.
Maybe they did not "make" extra revenue from late fees even if they did itemize it separately from rental revenues. The thing is, if you hold it longer they can't rent it out again, so it seems fair to charge you more if you are late. Maybe they would have rented it again, or maybe not, but there is some sense in the old policy even if it was aggravating to the customers.
The new policy may not be better than the old. Their problem is inventory. Netflix style seems a better system than "hold it too long you own it" but they probably will make extra money by being able to manage inventory better.
Sometimes you can override the playing of trailers and skipping past the title screen by turning "Auto Play" on, on your DVD player if there is an option for it in the menu. What Auto Play does is automatically make the DVD player play the first chapter. On my MASH television series DVD's, it starts the first episode on the disc at the opening credits, and I don't even see the FBI warning or the FOX Studios disclaimer in 3 languages text screens at the front end of the disc.
Good for Blockbuster!!! I only wish I could find a business model that could make money from morons not smart enough to follow rules. And -- I mean that. With all sincerity. I'm tired of following the rules and being screwed. If I could steal money, I would.
Blockbuster is having a difficult time because the business model is changing. Apparently, you don't know that. You only want to keep ypur rentals as long YOU WANT, wityhout a penalty. Sounds like a (gasp!) LIBERAL.
Maybe it is just me but why would anyone want to own movies/dvd's (with the exception of kiddie movies for the kiddies who can watch tripe over and over?) If I have seen a movie I really don't need to see it 50 more times.
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