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.
Shrek 2...I swear, it had just about every conceiveable Dreamworks movie trailer under the sun on it, telling me "Coming Soon To A Theatre Near You", and these movies had long since been through the movie theatres and were already on DVD.
Many freepers are making a big deal about not returning the movies on time. I agree with you and between children, other good things on TV and playing on the web or freeping, lots of time I dont get a chance to watch both movies let alone all three. I am waiting for the setup that allows me to watch any movie on my TV at anytime I want. They should make a fortune.
"The new policy may not be better than the old."
Well if you are now charged the MSRP of a DVD if a week late in return, I'd call that worse.
A policy like that just makes owning a title even more attractive especially since a lot of online retailers offer 40% or more on preorder of MSRP.
"Their problem is inventory."
Which I believe I've already stated earlier in this thread and am in agreement.
I rented two of those from NetFlix (FahrenHYPE 9/11 had a really long wait, so I bought it), but it really surprised me that they even had them because 100% of NetFlix's political contributions went to Democrats. That has been the only troubling thing about NetFlix.
I tried Blockbuster's for the free two weeks but their delivery was so slow. I received emails on the same day from both Blockbuster and NetFlix that they each had shipped a movie. As usual, NetFlix's arrived the very next day, while Blockbuster's took 3 or 4 days. Both have local distribution centers, so I dont understand it.
Has anyone tried Wal-Mart's? What is their selection like? Delivery time, etc?? They are a good Republican company anyway.
"Blockbuster is having a difficult time because the business model is changing."
They've been changing for years and BB has refused to acknowledge it.
I'm more of a supporter of owning a title rather than renting. I own around 1,000 titles in my DVD library and haven't rented a title in years.
I'm with you. There are only so many movies worth my time and those are the ones I will watch. I'd rather watch Young Frankenstein 3 times than to see 3 random new releases.
The star system is really quite lame imho, since films are packaged and build around a personality. But like sports, it is also most fair to pay heavily for the actors who draw in a crowd and sell tickets. I agree that the result is usually a bad product but most people are not like me when it comes to films. They go to see Kevin Costner or whatever and pass some time, not to listen to sound design or marvel at the ligthing techniques.
Many digital cable systems have that in place. DISH Network satellite has a personal video recorder receiver, and DirecTV satellite has a TIVO unit.
I own Shrek 2. I'll have to stick it back in the player and watch for the ads.
There is another rental company called Metura (sp?) that has all sorts of educational video.
I am interested in other peoples experience in cd rentals
Sorry, I must've missed that one. I agree. I am kind of ambivalent in my posts because I just don't go to BB. I don't like their stores, their selection or their policies. The new changes wont effect me. Now that I bought the ReplayTV DVR's I may not ever rent again. I was just trying to think about it from their point of view.
It's www.deepdiscountdvd.com.
The $250 price I assume would be for the entire series. I've been buying it season by season.
I haven't set foot in a Blockbuster Video since they instituted their stupid weapons policy (no guns, even if you're a legal permit holder). With a policy like that, it isn't safe to go into the store, or even the parking lot. I don't know and I don't care if they later repealed the policy. I say Blockbuster sucks for even trying to pull that crap.
I'm into HD now with two HDTVs and a DVHS player. Satellite just isn't there yet in relation to that format.
And why would I buy one for $12 that I wouldn't go see for $8?
Great site. I found it. The 26 DVD series is $179.00. Helen Mirren's Painted Lady is $10.78 vs around $19.00 on Amazon. On the other hand "Wives and Daughters" is the same as Amazon. I'll buy from them tonight ... good place. Thanks!
I doubt the store bought DVD you have has as many ads as the video store rental DVD did. All the store bought DVD's I have don't have ads for other movies, but they do have theatrical trailers for the movie that is on the DVD, complete with scratches, splices and eyelashes.
Yeah, back east they have some options like HBO on demand, you can watch any HBO production ever made and some of them are quite good. Oz, Larry Sanders, Dream On and of course Sopranos, etc. I can't get that here in LA with my crapola Adelphia cable package which is why I just went and bought my own DVRs. I don't want to be at their mercy anyway. By they time they roll it out here, I will already have 1000's of titles saved on my computer - almost entirely automatically. I just pick what I want to record, and the computer automatically backs it up onto hard drive space. It's my own video on demand system.
? There is no difference between a store bought vs. rental DVD.
Not sure what satellite system you have, but DISH Network has an HD package you can subscribe to with about 20 or so HD only channels, including Showtime HD, HBO HD, TNT HD, and ESPN HD just to name a few.
Yes.
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