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Jazzy33 (< 20)

Is Blockbuster Back?



December 28, 2008 – Comments (2) | RELATED TICKERS: BLOKA.DL , NFLX

Recently while driving down the street I passed several Blockbuster storefronts. Past the large blue movie tickets and through the glass windows I saw each with customers scurrying about. While many have dismissed Blockbuster as a falling Behemoth that once was and never will be again, I see something quite different going on. With the advent of CEO Jim Keyes, this once domineering movie rental giant, has once again started alluring customers to their brick and mortar celluloid havens. What they have realized is that competing with the likes of Netflix is not as important as focusing on what makes any great retailer successful; having a strong competitive advantage.

Blockbuster is no longer a simple video rental chain, they are now becoming more of a "one stop shop" for entertainment buffs of all types. Whether you are looking for the newest Blu-ray release, a great deal on a video game or hoping to see your favorite band rock the house in a nearby venue, Blockbuster has what you need. Sure they are still laden with debt that must be taken care of, but I believe that the best days of Blockbuster might still be ahead of them. As long as they continue to focus on their core business of entertaining the masses and if they can keep adding leadership of the likes of Keyes to their corporate structure, I believe that they will be a shining star far into the future. Well maybe more like a shining movie ticket!

2 Comments – Post Your Own

#1) On December 29, 2008 at 1:11 AM, WakeJKirk (86.41) wrote:

Honestly, I just don't see it.  It's true they are expanding into newer mediums with the Bluray addition but they are still doing a lot of things wrong.

I was walking through the local Blockbuster tonight actually and a I noticed a number of things that Blockbuster is doing wrong:

1.  Failure to notice demand adequately.  Example:  It seems like they have way too many copies of what they think is gonna be big rather than what actually is.  For instance, there are 80 copies of Tropic Thunder sitting there but there are only 3 copies of the movies that everyone is recommending in town.

2.  They aren't doing their research on video games.  They are doing the same thing with video games that they are doing with movies.  You will see way too many copies of Spiderman 2 rather than a game that you would see on Amazon's top five list.  

Maybe I'm totally off and it's only a local thing.  I could see them coming back but they still have a long way to go. 

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#2) On December 29, 2008 at 2:34 AM, hondo928 (97.91) wrote:

I actually think you may have a point however, it's really a bust or payoff situation.  I think they need to seek consolidation with MOVIE Gallery who is already bankrupt, and keep only their most profitable stores open.  I think playing the options wouldn't be a bad play if you can get someone to write them, with the lowest price being 2.50 though, unless they reverese split sometime in the near future I'm not sure their really is any play on Blockbuster, the risk-reward just isn't there on the common stock.

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