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Blockbuster hopes to compete with Netflix by not competing with Netflix

Written by Rich Fiscus @ 10 Nov 2007 3:35 User comments (14)

Blockbuster hopes to compete with Netflix by not competing with Netflix Earlier this week Blockbuster CEO Jim Keyes announced a new focus for the company. Ironically, the new focus is on the company's old brick and mortar rentail business.
Keyes spoke about the company's Total Access plan, which this year made Blockbuster the first company to ever seriously compete with Netflix in online rentals. "The concept of Total Access—brilliant. The execution of Total Access left a little to be desired," Keyes said. He was referring to the fact that despite being a success in terms of attracting subscribers, so far the program has failed to turn a profit. In fact, according to Keyes the program has cannibalized Blockbuster's in-store customer base.

"We've decided that instead of a horizontal shift [to mail], we think there might be more of a vertical opportunity to move customers across channels so that store customers don't have to only move to digital or by mail," he said. "The ability to transform these customers and allow them to have different use occasions and sources of access, we think is a more relative model for us and will be the more likely migration path over the next few years."

One of the methods Blockbuster intends to use for their digital delivery plans is the newly acquired Movielink download service. Blockbuster bought Movielink earlier this year in an apparent attempt to compete with the Watch Instantly feature debuted by Netflix earlier this year. The purchase gives Blockbuster access to what Keyes calls the "largest amount of digital title rights in the marketplace today."

However isn't in a hurry to implement the new technology though, telling analysts "Let's very carefully explore and continue to penetrate a digital model but not prematurely."

Source: Video Business

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14 user comments

110.11.2007 16:39

doesnt netflix has a donwload movie service as well i dont get it blockbuster is trying hard to fight a online movie rental service when alot of ppl like to pick up movies...they should both worry about different aspects.....

210.11.2007 17:54

I'm glad that Blockbuster didn't try and pencil whip this thing to look like everything was running smoothly and instead admitted defeat for this round of battle.

311.11.2007 01:08

Wow, the spelling and grammar on these articles is getting worse and worse. It's almost getting to the point where it's unreadable.

411.11.2007 02:48

I used both netflix and blockbuster online for almost two years (yes, I have a life, but also I love movies) I canceled blockbuster two times, because they edited their dvds, specially the series, and to make matter worse, a lot of movies were not available for extremely long time (and I'm not talking about new releases, that would've been understandable), and almost NEVER followed the order of my queue list, the only reason that I re-started my service was to increase the chances of getting certain titles, but the second time around only lasted two months, because I had the same problems as before and customer service was the worst, when they started that "return the movie in the store and get another one" stuff, I wasn't thrilled, the whole idea of renting online was that I get the movies at home, without me GOING to the store (I used to work an extremely changing schedule, so was kind of hard to use the store hours,imagine that) and didn't mind waiting a couple of days for the next titles (netflix has been real quick about that until a couple of weeks ago). So if blockbuster really want to beat netflix, they need not a new flashing scheme, but to fix the things that really are messed up, and a CEO patting his own back for the total access stuff, is not impressive either.

Just a Thought

511.11.2007 07:07

Bangor09 those are my same reasons. The only time i go back to Blockbusters online rental is when there is a movie that netflix doesnt have. With netflix put a movie in the que its shipped the next day if there isnt a wait. I would put a movie in the que and they would ship it to me 3 to 4 days later. (Ship not get the movie but mail it 3 to 4 days later)

611.11.2007 12:55

I say its pointless to wait 3-4 days for a movie when you can run down to the sotre and rent it yourself and have it returned in that amount of time. :S

711.11.2007 13:25

Originally posted by cart0181:
Wow, the spelling and grammar on these articles is getting worse and worse. It's almost getting to the point where it's unreadable.
Not as bad as the kiddie site MaxConsole!

812.11.2007 02:48

Originally posted by andersg:
I say its pointless to wait 3-4 days for a movie when you can run down to the sotre and rent it yourself and have it returned in that amount of time. :S
The thing is, sometimes they were not available even on the store (I'm looking at you HOLLYWOOD VIDEO, and your so-called warranted on stock)and most of the times I got the full-screen version even when the box said wide-screen (now I'm looking at you Blockbuster)not that wouldn't matter in a lot of movies, mostly in comedies, but in Horror, Action or Sci-fi, there's a lot on difference, (we missed a lot on the vhs days, huh?)and the other hand in my case, if I sent a movie back I would get another one the second day after (i.e. sent it Monday,get new one wednesday, my day off.

915.11.2007 14:58

We plan to compete by not competing reminds me of of the John Kerry statement "I was for it before I was against it." lol

1015.11.2007 17:24

They have gotten rid of 3 brick and mortar stores in my area and I know they are hating themselves for doing the mail rentals according to their CEEO they want to go back to the 4 buck rental fee well goodluck Redbox is here baby $1.00 so who do you think we are going rent from?

1115.11.2007 17:53

I drive by a blockbuster to rent my movies from a Ma and Pa movie joint. It's cheaper and there's something magical about walking throught aisles and aisles of movies.

1216.11.2007 10:28

Jim Keyes is a typical CEO trying to make nonsense sound like an epiphany. They and the politicians are ruining the free world.

I have been renting on line for ever. Right now I am using BB until I get sick of them. They are inferior to HF but cheaper and a bit more ethical in dealings with the customers. You can’t get sleazier than NF and stay in business. They were supposed to give me a free month of service 3-4 years ago, but never did. The free month was due to a class action suite a more years back that was before BB online. They never stopped the throttling process. Recently, I think BB is starting to throttle my account. I used to get 3 movies a week. This week I only got 1 (the one delivered to the store. The other two which I know they got last Friday still ‘have not been received’ a week later. BB are still pikers compared with the pros. My worst case scenario with NF was I sent 2 disks in the same envelope. One was ‘received’ 10 days after the other one in the same envelope. I will never go back to NF unless they really change. Another good trick is to bill you for an extra month. If you cancel with BB your service continues till the end of the month. With NF the service ends then. Therefore you want to wait till the end of the service month to cancel. However, if you wait till a few days before the end of your service they bill you for another full month of service with no service. Just try to get that money back! It is amazing that the cancellation of service is instantaneous but the cancellation of the billing takes days. To be safe do not cancel in the last week.

The reason BB started losing money is because they were growing too fast. They were buying too many disks to try to compete with NF. They have a long way to go there.

philly37 the received and shipped dates are generated by the inventory program when they are put back onto the shelf and taken off the shelf. It 'figures' when the ship or received date at that time. They have NOTHING to do with reality. They do not scan when they come in and out of the warehouse. I have gotten disks before they were shipped from both stores. My advice is if you get one of those do not send it back before the ‘shipped date’. If you do you will get severely throttled. I live in the town with the main hub for both stores. BB started in the same town hoping to hire old NF employees. We also have the county post office hub in our town. I live near DC and I have gotten things to Boston overnight by posting it at the hub.

1330.11.2007 01:29

Blockbuster hopes to compete with Netflix by not competing with Netflix
Like the heading does not make sense neither does the article what a waste of article space.

1414.12.2007 11:49

I recently switched from BB to Netflix after the new CEO came in and endured himself to current members by decreasing the number of movies you could rent in each on-line rental plan. A stealth move to implement a price increase.

I was originally a little leery of Netflix but I was eventually very impressed with their website. The California Company has obviously taken advantage of the large pool of very qualified high tech workers in the state. The on-line movie viewing service, though currently somewhat limited in its selections, has surprisingly good quality using my DSL connection. I especially like the movie preview section that offers a unique method for selecting movies. BB has a long way to go on their "clunky" website design before they can match Netflix.

I'm from the Dallas/Fort Worth area, BB's home office, and I see BB going in the same direction as the areas other former large retail operation Radio Shack. Back in the 70s, the Shack had an opportunity to become a major player in the emerging PC market with the first home PC: the Model 1. Management's obsession with maintaining exclusivity over every aspect of this product drove PC buyer's to the new kid on the block Apple, a much more customer friendly company. In addition, IBM's move to sell manufacturing licenses for the PC architecture delivered a blow to Radio Shack that eventually ended their participation.

In conclusion, arrogance within the CEO ranks of too many U.S. based companies reflects an old business model that has no place in the 21st century. Customers and investors have had it with overpaid corporate management that keeps using a 1970s U.S. protectionist playbook to snatch defeat from the jaws of victory !

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