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Blockbuster stock drops in response to Apple movie rental announcement

Written by Rich Fiscus (Google+) @ 15 Jan 2008 22:53 User comments (9)

Blockbuster stock drops in response to Apple movie rental announcement 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%.

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9 user comments

116.1.2008 1:02

Die already, greedy pigs.

216.1.2008 11:28

This drop does not surprise me. Blockbuster tends to wait until other companies' good ideas become very popular before adopting them. They are also looking into the kiosk business as well.

In the end their attempts at keeping their business afloat will be too little too late as other companies that are willing to take the risks now will be the main choice for consumers. With the popularity of iTunes and Netflix, Blockbuster does not stand a chance at getting good business from online video viewing.

I personally have not gone to blockbuster in months since their in store selection is very limited, and I have Netflix.

316.1.2008 12:19

I've got a BlockBuster here locally. I have an active card and haven't rented from them coporate hoochies in a long time, and probably won't.

Instead, i use a local mom and pop video store. I convince all my friends to rent from there in an attempt to make sure BB doesn't force them to close there doors.

I'm not suprised to see the drop and hope it continues. I'm no fan of the Blockbuster franchise, though i raid their dumpster frequently for Dvd cases. :)

EDIT: improper spelling and punctuation.

This message has been edited since its posting. Latest edit was made on 16 Jan 2008 @ 12:21

416.1.2008 15:00


517.1.2008 19:09

I8 cock busters! Go out of business U bast-tards!

617.1.2008 19:09

Arogant weeds! Ya got something good and yew screw us peoples! Yeah, I hope ya go out of business or move to China!

This message has been edited since its posting. Latest edit was made on 17 Jan 2008 @ 19:11

718.1.2008 21:29

I love how things work. Raise our rates to $19.99, we're screwed. Apple gets in the game, you're screwed.

Your turn.

819.1.2008 23:10

No one has mentioned their biggest threat the Red Box vending machines. Their stock is still too high! They have a very rough road ahead.

915.2.2008 16:53

I think by the end of the year Blockbuster online rentals will be no more. Sad but it will happen.

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