Rich Fiscus
15 Jan 2008 22:53
As if they didn't have enough problems competing (or refusing to compete) with Netflix, now it appears that the official announcement from Apple that they'll be offering movies for rental from iTunes has stockholders worried. After the official announcement from Apple today, Blockbuster shares dropped more than 15% to $2.69.
According to the Associated Press, Blockbuster spokeswoman Karen Raskopf responded to questions about Apple's plans by saying "We view Apple's announcement as a great way to create consumer awareness, and we believe we are positioned to capitalize on that increased awareness."
Blockbuster rival and leader in online DVD rentals, Netflix, was also affected by Apple's news. Although their stock price lost $0.72, it only amounted to a 3.2% decrease. Earlier in the week Netflix announced that all subscribers will now be able to take advantage of unlimited Streaming through their Watch Instantly service. Previously Netflix customers were only allowed a limited number of hours per month, depending on the rental plan they had.
While this gives them something of an advantage in some ways, their selection of movies doesn't include new releases like Apple's new offering. Netflix spokesman Steve Swasey indicated that the company isn't too worried about competition from Apple. "Apple and Netflix are taking two different approaches ... to getting people watching movies on the Internet," he said. "But it's still a DVD world, and it will be for a long time."
Although Blockbuster owns Movielink, a failed online movie store they purchased last year, they haven't integrated it into any of their other products like Netflix has done with Watch Instantly.
Ironically, Apple shareholders weren't nearly as impressed with the new products and services introduced by Steve Jobs at the annual Macworld expo as their competition apparently was. Shares of Apple lost nearly $10, closing down 5.5%.