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Media

Blockbuster, Staggered, Loses Its Footing

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By Douglas A. McIntyre Updated Published

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Blockbuster, Inc (NYSE: BBI), nearly ruined by the high cost of its store network and withering from competition from NetFlix (NYSE: NFLX) and the kiosk operator Redbox, posted another quarter of dismal results. The rental chain’s net loss for the first quarter of 2010 was $65.4 million, or $0.33 per share, compared to net income of $27.7 million, or $0.12 per share, in the first quarter of 2009. Revenues for the period was $939.4 million, compared to $1.09 billion for the period a year ago.

Worldwide same-store sales for the first quarter of 2010 declined 7.1%.

The stock fell over 17% after hours.

Blockbuster’s initiatives to save itself are almost certainly too little, to late. In a partnership with NCR it has opened 4,000 rental kiosks. Redbox has over 25,000. Blockbuster also has an untried partnership to download content to T-Mobile’s HTC HD2 smart-phones. Premium films and TV have been available on handsets for several years, but the business has been slow to gain ground.

Blockbuster is still burdened by its operation of 4,914 stores. Its major competition is from relatively lower cost DVD-by-film, digital download, and kiosk operations.

What was true last year is still true at the end of its most recently reported quarter. Blockbuster has no future.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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