Blockbuster (BBI) Still Losing Foot Race Out Of Hell
March 25, 2009 by Douglas A. McIntyre
As the number of people who are willing to drive to a store to pick up a movie dwindles, so does Blockbuster’s (BBI) chances of staying alive.
Blockbuster has tried to remedy its problems by getting into the business of offering films on DVDs via mail. Netflix (NFLX) has most of that market locked up.
Blockbuster is also in the business of streaming movies over the Internet, but there are a number of firms which have offered similar services for year.
The film retail company’s latest program to save itself from insolvency is to send movies to Tivo’s (TIVO) TV set-top digital recording devices. Tivo has had very limited success competing with cable companies in the digital box space, so Blockbuster is setting up a partnership with an also-ran.
Blockbuster will also not have the advantage of being the first movie service on Tivo. According to Reuters, “Blockbuster claimed that its roster of movies on TiVo will outshine that of online choices available at Netflix and Amazon.” That remains to be seen. Even if the Amazon (AMZN) and Netflix (NFLX) libraries are limited, most cable systems offer their own VOD services with recent releases.
Blockbuster’s problem is that it still operates thousands of stores that very few customers visit. Unless it can close those outlets faster than consumer demand drops, it can’t stay in business, even with Tivo.
Douglas A. McIntyre
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