Blockbuster's Keys to Success

Founder of DVDXpress urges Blockbuster to leverage its advantages to compete more favorably with Netflix and RedBox.

May 10, 2010

DALLAS - An article last week at BNET.com speculated as to Blockbuster€™s future and whether it can survive in a world evolving to mobile devices and online streaming of movies and TV shows.

Saddled with nearly $1 billion in debit, Blockbuster€™s brick-and-mortar infrastructure is dragging the company down "in an industry that€™s growing more virtual every minute," writes the news source, adding that at least one Blockbuster shareholder has a plan that could turn the company€™s fortunes around.

Gregory Meyer, founder of DVDXpress, which he sold to Coinstar in 2007 (and has since merged with RedBox), maintains that Blockbuster can regain control of the movie rental business by making all of its movies accessible via digital media €" online, iPad, and console streaming €" while bringing its DVD and BlueRay rental costs in line with those charged by Netflix and Redbox.

The article points out that Blockbuster is the only movie retailer to offer new movies the day that they are released as a particular strength for the company, in contrast to Netflix and Redbox, which both have to wait 28 days before releasing movies.

Blockbuster currently operates 7,000 stores worldwide, though it plans to close at least 500 by the end of this year while introducing 10,000 DVD kiosks.

Meyer maintains that remaining stores should sharply curtail their hours, and that the company should sell many of its assets.

Blockbuster can also point optimistically to the closure of Movie Gallery and Hollywood Video, two of its largest competitors. As such, it remains the main brick-and-mortar movie rental company, another strength that when coupled with competitive pricing, could allow the company to regain market share.

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