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Discussion Starter · #1 ·
To perform WORSE than analysts expected (even when expecting a loss) is pretty significant. Their strategy for recovery is not working.

Quote:
Blockbuster Inc. says its second-quarter loss narrowed as the struggling video rental chain cut costs amid declines in revenue. The results are below analyst estimates, though.


Dallas-based Blockbuster said Thursday it lost $39.7 million, or 21 cents per share. The company's loss totaled $44.7 million, or 23 cents per share, in the same quarter last year.


When excluding one-time items, Blockbuster lost 19 cents per share. Analysts polled by Thomson Reuters, who generally exclude such items, expected a loss of 12 cents per share.


Revenue fell nearly 22 percent to $1.02 billion, missing the $1.12 billion analysts were looking for.
http://news.moneycentral.msn.com/tic...057&Symbol=BBI
 

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Discussion Starter · #2 ·

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"We're not sure it's in our best interests to have day and date" for kiosks, Keyes said, adding that the $1-a-day rental rate by Redbox "is not a sustainable industry model."
http://www.videobusiness.com/article/CA6676732.html



I believe he actually said (paraphrased a bit): "From the cost of production to the expense of retail distribution, $1 per viewing is not a sustainable model."


He is not wrong about the cost issues, but there is nothing he or the studios can do to stop Redbox.... He seems to think the key is to keep on charging $4 for new rentals and use kiosks for something other than new releases.



Oh man, they are going to get buried by Redbox and Netflix...
 

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Discussion Starter · #3 ·
WoW!! Interesting....

Quote:
Blockbuster CEO Jim Keyes Aug. 13 hailed the decisions by Warner Home Video and 20th Century Fox Home Entertainment to delay new release DVDs 28 days and 30 days, respectively, to $1 dollar-per-day rental kiosks, spearheaded by Redbox.


Speaking to analysts during a second-quarter financial call, Keyes said Blockbuster had drafted new revenue-sharing agreements with studios, including one with an unnamed studio that provides new releases at a $2 to $4 recoupable minimum for the studio that he said more than covered the physical cost of goods.


It's intended to establish more of a profit-sharing versus revenue-sharing approach, Keyes said. We believe this is a win-win initiative that will result in an increased number of rentals and improved profits for the studios on the backend.


He said the profit-share scenario was even better with video games, in which the $4 shelf cost per title is overshadowed by $40 to $45 in cost otherwise.


If we can overcome this artificial obstacle to inventory management, we can then fill the shelves with games like The Beatles: Rock Band, coming out Sept. 9, Keyes said.


The CEO said the whirlwind of controversy surrounding rental kiosks revolved around charging $1 per day for new release DVDs.

We are concerned that through the cost of production and expense of retail distribution, $1 per viewing is not a sustainable industry model, Keyes said.


He said kiosks offered limited stock space (about 500 discs) that resulted in a dearth of new releases available to consumers.


For a movie like The Dark Knight, we stocked 400 units per store and still ran out, Keyes said. It will be very difficult to ever stay in stock on hot new releases in a kiosk environment.


He said proposed 30-day windows by Universal, Fox and Warner created a unique vending opportunity that the CEO said was complimentary to Blockbuster's multichannel business model.

He said studios with the kiosk window account for about 60% of total major studio product. The windows also enhance the relationship between Blockbuster stores and its nascent Express kiosks by allowing stores to carry less expensive stock in kiosks.


With Universal, Fox and now Warner titles, we can now be far more aggressive in filling the stores shelves with product, he said. After 30 to 45 days we can make use of that product in our vending channel at a substantially reduced cost of goods (about $5 vs. $15) since that product will be partially amortized. For Blockbuster that represents a pretty competitive opportunity.


He said the new agreements would also allow Blockbuster to close more underperforming stores.


This strategy will actually increase our points of presence while reducing a real estate liability, he said.


He said Blockbuster would have about 500 Express kiosks through partner NCR Corp. by the end of August, with 2,500 installed by the end of the year and an additional 7,000 kiosks installed through August 2010.



Keyes said the Express kiosks would be future proofed for implementation of digital distribution via internal servers when it takes off.
http://www.homemediamagazine.com/blo...-studios-16744
 

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Discussion Starter · #5 ·

Quote:
Originally Posted by Nosferax /forum/post/16996816


You know it's funny when you are answering your own thread....

I always know that regardless of how many times you say you are "done" with a forum or thread, you simply can't help from posting.


If you did not live in another country I would worry about you stalking me...
 

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Quote:
Originally Posted by PSound /forum/post/16996962


I always know that regardless of how many times you say you are "done" with a forum or thread, you simply can't help from posting.


If you did not live in another country I would worry about you stalking me...

1) I never said I was done with this section. I said I was done with a particular thread.


2) This is an open forum.


3) You post over 60% to 70% of the content of this section so it is normal that I reply more often to your post.


4) This is a serious accusation that you just made. I hope you have some definitive proof that I am stalking you because I should be oblige to report this.
 

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Discussion Starter · #7 ·

Quote:
Originally Posted by Nosferax /forum/post/16998147


1) I never said I was done with this section. I said I was done with a particular thread.


2) This is an open forum.


3) You post over 60% to 70% of the content of this section so it is normal that I reply more often to your post.


4) This is a serious accusation that you just made. I hope you have some definitive proof that I am stalking you because I should be oblige to report this.

If you think that was a "serious accusation", then I suggest you step away from the keyboard, experience life and realize what this forum is about.


We are sharing and discussing information on entertainment media. I like that information to be as factual and clear as possible, which is why I post so much info. I am glad I do as I have seen the FUD surrounding Digital Distribution of media drop significantly in the last 6 months which gives people who want good information or to share their own experience (good or bad) an opportunity to do so. Life is good!
 

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Discussion Starter · #8 ·
And let me also clarify that I took your "answering your own thread" post as a playful jab.. The intent of the response was not to accuse, but to respond in kind.


If you do not want that sort of banter then I suggest not posting anything with even a slight negative undertone towards any member.
 

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You don't get to decide how other percieve your post my friend. Likewise you don't get to chose in which thread or forum I can participate.


Stalking can get you banned on many forum. This is why I categorized it as a serious accusation. If that wasn't your intent then you should have not written it that way. This is why there is an edit button at the bottom. If you write something that could be missinterpreted then you can edit it. I use it often and it works.


As for the FUD that is something that is present on both side of the fence.
 

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Discussion Starter · #10 ·

Quote:
Originally Posted by Nosferax /forum/post/17000502


You don't get to decide how other percieve your post my friend. Likewise you don't get to chose in which thread or forum I can participate.


Stalking can get you banned on many forum. This is why I categorized it as a serious accusation. If that wasn't your intent then you should have not written it that way. This is why there is an edit button at the bottom. If you write something that could be missinterpreted then you can edit it. I use it often and it works.


As for the FUD that is something that is present on both side of the fence.

Shrug.


If you feel it is a serious accusation then please feel free to report it. In light of the post it is in response to, I see no reason to edit.


If you want to play the victim, that is fine. Keep in mind that your original post does not seem to have any intent other then being a jab in my direction... if you can't take friendly banter then I suggest you not try and play.


If you have an issue, take it up with the mods. Otherwise I am moving on from this particular part of the conversation....
 

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Quote:
Originally Posted by PSound /forum/post/17000763


Shrug.


If you feel it is a serious accusation then please feel free to report it. In light of the post it is in response to, I see no reason to edit.


If you want to play the victim, that is fine. Keep in mind that your original post does not seem to have any intent other then being a jab in my direction... if you can't take friendly banter then I suggest you not try and play.


If you have an issue, take it up with the mods. Otherwise I am moving on from this particular part of the conversation....

Whatever... and likewise.
 

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Disc rental is getting more interesting by the hour:



UPDATE: Warner Takes Aim at Redbox, Netflix

Quote:
By : Erik Gruenwedel and Chris Tribbey | Posted: 14 Aug 2009


Warner Home Video is drastically changing the way it sells DVDs and Blu-ray Discs to rental kiosks such as Redbox and by-mail services such as Netflix.


The studio Aug. 13 announced that come October, it will sell to them only directly, bypassing third-party wholesalers, and will withhold all new releases from kiosks until 28 days after street date — a restriction sources say will apply to Netflix and other subscription services as well, unless they agree to share rental revenue with the studio.

With legal victories against Kaleidescape and Real Networks the studios seem more determined than ever to control their content properties.
 

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Discussion Starter · #13 ·
With First Sale Doctrine, studios cannot control their content with physical media.



Right now there is only so much the studios can do. They can try and restrict access to discs from distributors, but not retail. Even then they may be opening a can of worms by having another legal precedent set.


First Sale Doctrine is ultimately in Redbox and Netflix's favor. There is absolutely nothing the studios can do to keep them from picking up the discs on the open market, renting them and then dumping them on the used market. I do like that Warner is opening up the revenue sharing talk with Netflix. It gives Netflix the option of discussing how Warner may be able to make more revenue per use via Digital Distribution instead of physical media (basically giving them the $.80 per rental they are currently giving to the USPS).



Also interesting to me is that Blockbuster looks to be getting in bed with the studios and will enforce the delay on kiosks (and maybe even subscription services).


Blockbuster seems intent to try and extend the existing (contracting) model instead of really innovate on moving forward with the new consumer driven models. If this gets wider press coverage (USA Today, etc), the editorials are going to make Blockbuster look VERY bad and could accelerate their decline.
 

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This is just another proof that optical media is dead or dying pretty fast. Businesses need to adjust and move away from physical model and go towards online distribution without retail distribution costs, packagings and so on.


This is why Netflix is succeeding and growing and Blockbuster, like an ancient elephant is dying. So much for Blu-ray saving them. You get what you wish for is I say.


My 2 cents.
 

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Quote:
Originally Posted by Wendell R. Breland /forum/post/17003298


With legal victories against Kaleidescape and Real Networks the studios seem more determined than ever to control their content properties.

I agree..and if people want just to rent then physical media model won't be able to survive because I believe their major revenue is to come from sales not rentals.


Online distribution also allows them to control their content better then with optical media.


All this doesn't come as a shock to me at all. It was seen coming a mile a way and Netflix and a few other services who started early will be the ones who survive in the long run.
 

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Quote:
Originally Posted by Bozster /forum/post/17003768


This is just another proof that optical media is dead or dying pretty fast. Businesses need to adjust and move away from physical model and go towards online distribution without retail distribution costs, packagings and so on.


This is why Netflix is succeeding and growing and Blockbuster, like an ancient elephant is dying. So much for Blu-ray saving them. You get what you wish for is I say.


My 2 cents.

We better all get to Best Buy this afternoon before they box up all the dvds and BDs and send them back to the wholesellers.
 

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Quote:
Originally Posted by fpconvert /forum/post/17004020


We better all get to Best Buy this afternoon before they box up all the dvds and BDs and send them back to the wholesellers.

Makes sense to some folks, lets give up a 18 billion dollar market and go chasing after a ½ billion dollar market.
 

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Quote:
Originally Posted by Wendell R. Breland /forum/post/17004143


Makes sense to some folks, lets give up a 18 billion dollar market and go chasing after a ½ billion dollar market.

But but but but it's progress man.. The future... People want their subpar encodes so they can watch badly encoded movie everywhere, on any screen
 

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Discussion Starter · #20 ·
Revenue sharing agreements are already in place with many rentailers. The funny part is that some of the most recent studio actions (including different sell-through and rental SKUs) are having rentailers abandon revenue sharing agreements.


Here are the facts:
  • The studios do not like the kiosk model.
  • It devalues their content.
  • There is NOTHING studios can do to prevent kiosks (or subscription services) from obtaining, renting and reselling their material once it is released to physical media.
  • Physical media revenue IS in decline.



Nothing is going to change overnight, but the trends with physical media are not in the studios favor. I personally am thrilled to see prices drop. It makes it less expensive to obtain content now, and is an incentive for studios to experiment with new and more convenient distribution methods. It is a great time to be a consumer of entertainment content!
 
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