Note to executives at Blockbuster (BBI): PEOPLE DO NOT WANT TO GO TO THE VIDEO STORE ANYMORE!!
Hasn’t the butt whipping they have received from NetFlix (NFLX) the past few years convinced them of that yet?
Blockbuster said on Thursday it was testing pricing for its rental formats and will experiment with store layouts to add downloading stations, books or beverages in a bid to shore up its customer base. CEO Jim Keyes said “Are we raising prices? No, as of today, what I don’t want to do is raise them three or four times.” The ideas mentioned for its new retail format include an interactive area in stores for children, a destination for downloading entertainment to portable media devices or a kiosk for Sony Corp’s (SNE) PlayStation 3 game console.
Then something was said that was incredible. Keys noted the retail success of Apple Inc (AAPL), which has a far smaller store base and sells its iPod digital media players, iPhone mobile phones and personal computers. “I get excited about what we could do with what is some of the most choice real estate,” Keyes said. Yeah, how about selling it and reinvest that money into the online operations!! The fact that Keyes even mentions his company and Apple in the same sentence illustrate a certain lack of grasp on reality.
Keyes said the company is still considering ways to build up a digital distribution channel for films. Proposals include merging its Blockbuster.com Internet site for ordering films by mail with its Movielink download service, and partnering with telecom and cable companies. This ought to be the sole focus of the company right now. This is the future, not a revamped “old way”. Any money being plowed back into the stores is just wasted. Stop trying to reinvent the wooden wheel and and admit the rubber ones are the one folks want.
Keyes also said that the change would not be “an overnight success”. Translation? More dismal performance for shareholders.
I think this is in part why shares are down 11% Thursday and are almost cheaper than a rental.
6 replies on “Blockbuster Refuses to Recognize The Reality of Their Business”
My girlfriend works at Blockbuster. In one of their past attempts to “revamp” their image, they began selling movie memorabilia, such as Grindhouse keychains and action figures, and The Simpsons Movie posters and toys. These items flew off the shelves! Makes sense; movies, movie memorabilia. If you have a store that does the same thing as an online service, it’s only logical to bring another aspect to the store, itself. It’s like a Suncoast store, with rentals. Apparently not satisfied with success, they stopped selling these items, told the employees that they plan on selling video camera hardware, and took away the employee water coolers to save money. Note to Mr. Keyes: Don’t be such an idiot. The movie merch works. Stick with that. NO ONE is going to go to Blockbuster to buy expensive electronics.
I was recently in a Blockbuster retail store. Oddly placed within the store, was a rack full of 3rd party iPod cables, cases, headphones, car tape deck adapters, and the like. All of these could be purchased from Target, Best Buy, or even Apple, for a similar or cheaper price. I asked the a few of the employees at the checkout, “how have those been selling?” “They aren’t,” they responded. Not much of a surprise. These items are generally not impulse buys, and anyone seeking these items is not going to think “Blockbuster” for their purchasing destination. The level of stupidity and naivety of upper management in this corporation is shocking.
Maybe if they aren’t going to realize that people don’t want to go to the store they can at least recognize their lines are awful.
Try self checkout lines!
doesn’t seem like they are just running around trying new things every quarter without any real plan?
doesn’t seem like they are just running around trying new things every quarter without any real plan?
Exactly. The thing is, some of these plans have proven more successful than others, or at least less unsuccessful. For the life of me, I can’t figure out why they wouldn’t repeat their methods for their last semi-successful quarter. It seems like every time I stop in, they’re selling a different category of non-video merchandise. Mr. Keyes seems like the type of business man who has no idea of the changing world around him, much less the suggestions of disappointed shareholders and customers. His ship is sinking, and the only way for it to stay afloat is if he and his crew grab their life vests and jump overboard. Maybe a group of savvy pirates can commandeer it and raise some new sails (sales).
Your blog is very interesting and informative. Blockbuster, Inc. is an international company providing in-home entertainment. It is the largest video rental chain in the world. Blockbuster has been of great frustration to me. I never got the ordered items. However, my friends are rather satisfied with the company. I have posted my comments and reviews to http://www.pissedconsumer.com. Hope others will not be tricked in.