Monday, June 4, 2007

Blockbuster (BBI) Still Playing Catchup To Netflix (NFLX)

In an analyst conference call Friday Lionsgate CEO Jon Feltheimer told industry analysts during a conference call, "We have nearly a dozen active agreements in place for digital delivery of our content with such major players as Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), Blockbuster, Best Buy (BBY), and Wal-Mart (WMT), with more to follow.

Now, it is great that Blockbuster (BBI) is finally getting into the digital game, a sentiment I pleaded for after their latest earning announcement but there is just one problem. Industry leader Netflix (NFLX) has been doing it since January. So now Blockbuster, who has failed in it's rumored attempt to acquire Movielink, not only must start a service from scratch, it must do so half a year behind it's chief competitor. Now, under normal conditions, this may not be such a daunting task but when you are hemorrhaging cash like Blockbuster is in it's quest to build subscribers, it then become daunting.

What is Blockbuster take? A Blockbuster spokesperson declined to comment on Feltheimer's statement. "We intend to offer a movie download service, but we have not provided any details on timing or anything else," spokesperson Randy Hargrove told Ars Technica. "It makes sense for us to participate in the download space, but we don't see it becoming a huge business in the next year or two. That said, it's something we think is important."

I got news for him, it is important now. The dvd is going away faster than the video cassette did. Has he noticed what the iPod did to CD sales? When is the last time anyone bought a CD? Of course one has to consider that this is a company that has yet to realize the stand alone video store is also a dying concept.

Now, he may be playing possum but based on the chain recent history he isn't and that is very bad news for the few folks who still hold shares.
 

blogger templates | Make Money Online