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.
Yep. You sound like the hallway monitor type to me.
No compassion for people who are tardy with their video returns? You've got to be kidding. You actually get worked up about these sort of things?
We are talking about a video rental here. Get a grip! I'd hate to see how hostile you get over things that are actually important. I admit to having been "laxy" at times and occasionally "braking" my solemn oath to abide by the terms and conditions of my "Bloickbuster" rental contract. Does that really make me an evil person deserving of no compassion?
Anyway, it doesn't matter anymore because now I am a Netflix customer and I'll never darken the doorway of mean old "Bloickbuster" ever again. Netflix doesn't care if I'm a bit "laxy" every now and then.
I guess I'm not so "stoopid" anymore!
Yep. You sound like the hallway monitor type to me. No compassion for people who are tardy with their video returns? You've got to be kidding. You actually get worked up about these sort of things?
We are talking about a video rental here. Get a grip! I'd hate to see how hostile you get over things that are actually important. I admit to having been "laxy" at times and occasionally "braking" my solemn oath to abide by the terms and conditions of my "Bloickbuster" rental contract. Does that really make me an evil person deserving of no compassion?
Anyway, it doesn't matter anymore because now I am a Netflix customer and I'll never darken the doorway of mean old "Bloickbuster" ever again. Netflix doesn't care if I'm a bit "laxy" every now and then.
I guess I'm not so "stoopid" anymore!
Pwned.
HD provides an excellent picture. It's not just sports. One of the HD channels in my area is the Discovery channel and the picture is stunning (on segments that utilize HD to its full potential).
Your current DVDs will still work on your HD TV and the picture is great. I'm sure they will release HD-DVD's in the near future but the increase in picture quality will not be enough to warrant upgrading all your DVDs as the picture quality is already quite good with existing technology.
You gotta be kidding me. I havent been to BB in 5 years, since I discovered I was getting all I needed from cable and buying dvds of movies I liked, even then I thought wth were they still wasting their time and store space on VHS junk anymore for. VHS has been obsolete for a long time now.
I'm looking forward to Hell Boy on the pay channels on cable.
your room sounds like mine...I have all those formats as well...I am gradually reducing the LDs because of laser rot...with cheap DVDs when available...gotten so I hate waiting for the LD player to change sides...
I'm keeping my SW LDs though. Since GL refused to release the originals, they are worth more.
I also own Kenneth Branaugh's Hamlet on LD which still goes for a tidy sum on ebay.
I have Shrek 2, I don't remember being forced to watch all this junk, though I do remember a Shark Tale trailer but I usually just punch up Menu and the title screen comes up. Forcing people to watch crap when they dont want to is a BAD business practice that will backfire, imo.
Disney, of course, is the biggest offender but I can still hit the Menu and be rid of it all, in most cases. I think the DVD player has alot to do with it as well.
Back in the mid-90s I was tangentially involved in one attempt to do movies on demand -- really on demand as you could pick from a large list and watch it at whatever time you;d like. Anyway, the distribution of the binaries for a large list of movies was unrealistic. For a cable system, you had to have a large central depository with disk farms arrayed out in the neighborhood nodes. Then you had to dump the movie to a local disk for playback. It was doomed to failure. However, today's disks are large and inexpensive so local storage is practical. Unfortunately, bandwidth is still a problem; dvd quality is around 9 Mbits/second so on a 30 Mbits channel it would take a third of the movie's length just to download it. A better codec like Windows Media might cut the bandwidth required in half but it would still be a significant amount of time. When you factor in multiple users downloading at the same time, it ends up being a "choose your movie and go get a cup of coffee/pop some popcorn" while waiting for your movie to become available.
I had Netflix for about a year. The only problem is that my family never watches movies fast enough to justify the $22 monthly fee. Sure, no lat fees etc but to make it worth while you have to watch movies and turn them around quickly. I really see the movie theater busimess dying. Why wait in line for $8-10 per person plus the popcorn when you can get microwave popcorn at home & watch at your convenience. Hollywood should just put everything straight to video.
What part of getting older and absent minded do you not understand?
my Charter system has my pay channels selections "on demand"...which is kinda nice. I just discovered that this comes with my subscription...I am getting to like it, but am getting close to dropping the services because I am getting what I want on Netflix...
The whole point of my reply to the other poster was that he/she seemed to complain about having to PAY a late fee. A classic whiner. No matter which way you cut it. Whether or not Bockbuster was aggressive or obnoxious in their application of late fees is not my concern. They had a late fee policy. Live with it, don't complain or don't rent from them. Seems simple enough to me.
Even my parents are converting to DVD, and they are not exactly movie fanatics.
Of course. On my DVD player you wouldn't see fifteen minutes of commercials, or the title screen or even the FBI disclaimer, it shoots straight to the start of the movie, because of the "Auto Play" feature in the options menu.
If there are scheduled showtimes, then it isn't really "on demand", it's broadcasting. Our cable has the pseudo on demand PPV system, too. Combined with a DVR, it works nicely. I can buy the movie, record it to the DVR, then my wife and I can watch it at our leisure.
The Holy Grail is where the cable system is like a personal DVD library. You pick a movie to see and it's downloaded to you alone.
I do believe that is what I said. I do not like their late fee policy so i decided not to rent from them. I was not whining, I was stating a fact.
If I wanted to whine, you would know it. I just don't like the Blockbuster late fees.
RIP Blockbuster!!! I haven't set foot in a BB in 15 years....ever sonce they said a tape I turned in ahead of time was late and owed a late fee!
The Hell with those idiots!
"You might enjoy The Aviator (Howard Hughes in his prime years' story)a good film about all American guts and ingenuity. Just read of a Australian "Hercules" (Hughes designed aircraft) delivering much need supplies to tidal wave disaster site. It's rated PG-13."
I think you're confusing the Lockheed C-130 'Hercules' used by the Australians and the Hughes-designed "Hercules' transport built during WWII, also known as the "Spruce Goose".
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