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Blockbuster gains share on Netflix, profits decline

Written by Andre Yoskowitz (Google+) @ 03 May 2007 15:13 User comments (21)

Blockbuster gains share on Netflix, profits decline After Blockbuster announced its first quarter earnings yesterday, a few things became clear. The company had gained market share on rival Netflix but at the loss of profit. Losses were $46.4 million total on revenue of $1.47 billion compared to the same quarter in 2006 where there was a loss of only $1.9 million on revenue of $1.4 billion.
Subscriber growth was up according to Blockbuster chairman and CEO John Antioco: "The first quarter of 2007 was our highest subscriber growth quarter ever, surpassing even the initial success of the program and providing clear testimony to the consumer appeal of our integrated online and in-store offering".

Antioco also stated that the company gained 800,000 new subscribers during the quarter bringing their total close to 3 million. He said the company hopes to reach 4 million subscribers by the end of 2007.

Although Blockbuster had a greater growth than Netflix did for the quarter, Netflix's 6.8 million subscribers still dwarfs that of Blockbuster.

However, the growth is coming at a price. The company's new Total Accesss Program, which allows users to return their online rentals in-store in exchange for a free rental is very costly. Blockbuster also runs the risk of cannibilizing their brick and mortar rental store business, as online rentals skyrocket and in-store rentals shrink.

Blockbuster also completely lacks a download service which Netflix has (although it is in early development) and as time passes and more and more users move onto downloading over physical discs, Blockbuster will be forced to play catch up again.

Source:
Arstechnica

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21 user comments

13.5.2007 15:41

How many new subscribers are still with them? I sure wouldn't be from the stuff a friend of mine tells me as to how long it take for the movies to get back to the center and then ship out again.

23.5.2007 15:44

I love total access, it takes about a day for them to ship a DVD and 2 for it to come, but you just switch it in the store so your still satisfied while your other movie is on its way

33.5.2007 19:40

I belong to both services and Netflix is faster by two days on average. I don't appreciate that Blockbuster took away one of the free e-coupons per month and preferred the old way. However, Blockbuster's selection is slightly better on older films and special interest DVDs like documentaries than Netflix. Netflix is far more responsive to customer requests, though and their Web site is a universe faster. Don't even try to use Blockbuster with Firefox. You'll get the "unresponsive script" error.

43.5.2007 20:47

yeah it took me forever for the dvds to get from my house, to the warehouse, and to ship my next in queue.. it would take me days.. and if I sent all 3 at once, for some reason they dont process all 3 at once so you could wait up to a week for your last movie to even show as "recieved"... stick with Netflix thats all I have to say..

53.5.2007 20:58

Blockbuster is fast here in San Diego, 1 or 2 days max. I also returned a couple to the store, and rented out a couple(free exchange). They were due in 2 days, but BB doesn't charge a late fee if you keep them out for up to a week. I was a big netflix fan, but BB is even better. I remember the old late fee days, and I'm glad they are over. I don't think netflix can compete. Downloads are silly, because - how do you get them to play on your HDTV. Burn them to disk? That is just plain stupid. My daughter had a friend over, and they wanted to watch Garfield 2, so we ran to BB and picked it up. Case closed.

63.5.2007 21:33

Originally posted by maddogstu:
Blockbuster is fast here in San Diego, 1 or 2 days max. I also returned a couple to the store, and rented out a couple(free exchange). They were due in 2 days, but BB doesn't charge a late fee if you keep them out for up to a week. I was a big netflix fan, but BB is even better. I remember the old late fee days, and I'm glad they are over. I don't think netflix can compete. Downloads are silly, because - how do you get them to play on your HDTV. Burn them to disk? That is just plain stupid. My daughter had a friend over, and they wanted to watch Garfield 2, so we ran to BB and picked it up. Case closed.
LOL, or you can use one of many cables to connect your PC to the TV... ;)

74.5.2007 6:35

BBI clocks in at around $200/year. If you buy cables/wirelss/video card or whatever to port from computer to TV, then you still have to pay to download. IMO, it's not worth the mess and/or effort. It might have cool factor, but that's about it. I've burned all kinds of movies, but BB is just easier. If anything I might add a few drives to DVR and save stuff from cable.

84.5.2007 6:38

Yea, I currently have Blockbuster, its really only worth it if you get Total Access, I live in Los Angeles, and the warehouse is in Santa Ana so I average 6 online discs a week and 6 in store rentals a week, which is a TON considering I only pay 20 bucks a month, as for them switching out the e-coupons, whats the point of those now (except for the video games) since you get free in-store rentals with the online envelope...Blockbuster online still needs more selection, but it is definitely working on it! Either service is good though

94.5.2007 11:59

I use blockbuster access and I love it. it takes about 3 - 4 days for me to get my new discs in my box. I pay 20 bucks a month for about 24 dvds a month. Hell can't beat that if you ask me. I also like it better than netflix because you could never remember all the movies out, so when I trade them in at blockbuster I wonder around looking at the old movies, while I save my online rentals for the new releases.
LD

104.5.2007 15:46

Quote:
Although Blockbuster had a greater growth than Netflix did for the quarter, Netflix's 6.8 million subscribers still dwarfs that of Blockbuster.
They still have some ground to make up. 800.000 is a little drop in the ocean compared to the other figure.

Myself i am a bit old school i rather go to the store and get my hands on a copy of what i want.

114.5.2007 17:09

I cancelled Netflix and went with Blockbuster for only a month. I didn't like them and went back to Netflix which is much better.

Blockbuster wouldn't ship for a day or two after getting my movies back. One time it was 5 days before they shipped anything.

Blockbuster was really poor compared with Netflix!

124.5.2007 20:26

I have had both Blockbuster and Netflix and find the latter far superior. They get my returns the next day and ship on the same day, getting my neew ones back either the following day or the one after that. They also have a hugely larger choice of films both domestic and foreign. Their customer service is also very responsive, almost always giving you a bonus dvd for any sort of complaint.

134.5.2007 20:36

I got rid of Netflix 1 month ago. Why? For me it is about getting a new release asap. Blockbuster allows me to return a online rental on tuesdays thus allowing me to get those new releases.
My only complaint is a gal at my blockbuster store that bugs the heck out of customers to buy popcorn, candy and other junk.

144.5.2007 21:43

I live in Los Angeles and Netflix seems to think I return movies too fast and now ship movies to me from the east coast and even Alaska.

155.5.2007 2:38
garywojo
Inactive

I have had both services and I became tired of Netflix taking up to 5 days to process my returned disks after the initial newbie period.
At first Netflix was extremely quick at processing my returns, then they seem to puposely delay them. At least with Blockbuster, I can go to the local store and get a free rental. I also had a much better experience CALLING the customer service line at Blockbuster than I did at Netflix. They also gave me free instore rentals each time I had a disc problem. Selection and online interface may be better at Netflix, but Blockbuster seems to try harder and care more about keeping their customers happy.

165.5.2007 4:44

have had blockbuster for about a month now. found out it is faster when you return movies in store. so I reurn 3 and get 3 the 2 days later I get 3 more in the mail. got tired with netflix slowdowns even with a netflix center right in my town. olso have had an increasingly bad time with movies that won't play even after cleaning

175.5.2007 6:27

I became a Netflix customer shortly after they first started. Haven't tried Blockbuster since I'm happy with Netflix. I Live in South Carolina now, and the distribution center is located at a town that is 45 min. away from where I live. Since I don't watch too many movies, I have the basic plan, and I get 8-10 movies per month for $9.99. When I get tire of Netflix, I'd probably try Blockbuster...

185.5.2007 7:09
pastorive
Inactive

I switched from netflix to blockbuster and it is the best thing I could have done. I get 3 movies for $17.99 and can switch them for 3 more movies at the store after I see them and by the time I see those 3 I picked up at the store I receive the other 3 movies. Then on top of that I get a free coupon every month for either another movie or a game which my son usually gets a game which has a rental value of $7.99. I get to see a minimum of 6 movies a week for a total of 25 a month minimum including the free coupon. The only disadvantage that I could think of is if you don't have a blockbuster store in your area. It is so great that I think I have almost seen everything in the store by now and am just waiting for the new arrivals to show up every week. I have started to see the old but good movies which I hadn't had time to see before.

196.5.2007 6:35

I had been a member of Netflix for 2-3 years. and enjoyed receiving movies that I could choose the format (full screen). And I received them often due to living close to a distribution center. Moving to another state and living 3 hours from the new distribution center, mail became quite slow, and I would become frustrated. However, I liked their que format and the variety of movies. I started with Blockbuster, and am happy with them because of the Total Access. I usually average around 30-34 movies a month. The one time I contacted customer service, I received immediate attention and a free coupon. My only complaint has been that almost every movie is widescreen, and I am not ready to purchase a widescreen tv. I am still content with my old full screen. I do believe that since Blockbuster has been losing money on the Total Access, they will probably increase the cost and/or keep the cost the same and use only mail order process. The other matter is online movies that Nelflix is trying. I must say that Blockbuster has done well overall with the Total Access program, and I appreciate it!!!

208.5.2007 4:22

I am real familiar with both since I have been renting for over 5 years. Both companies tally your disks per week. They both would only allow 3 disks per week. After BB can up with TA Netflix sends more than they used to but I have never gotten 6 disks in a week for the 3 at a time movies. BB will only send out 3 movies a week unless they 'owe' you some. However, that translates to 6 disks. 6*4 = 24 disks a month for $17. That is a real deal. Even if you only watch 5 per week you are still paying less than $1 a disk. I feel BB is the better deal. I have not been pushing to watch my 6 every week because that is my personal saturation level.

218.5.2007 22:43

you cannot beat blockbuster for sheer volume of rentals if you are willing to go to the store to claim your free in-store rentals. blockbuster is about a day slower in mailing your DVDs. i don't like how the blockbuster rental list takes so long to update, but as long as you know the order of your rentals it's not a big problem.

if you're only interested in seeing 10 movies a month on the 3-rentals-at-a-time plan then you're better off with netflix.

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