Blockbuster To Close 960 Stores By 2011

Several months ago, we wrote about Virgin Megastores slashing its US outlets, a sign of both a troubled economy in general and an entertainment industry that is struggling with sales in particular. The music industry alone has seen a drop in CD revenues of nearly $600 million over the past decade, and while legal downloads have helped the business stay afloat, that doesn't help retailers. Now Blockbuster is closing about 20% of its 4,400 stores in America over the next 15 months. The reason why is obvious: Blockbuster was late to accept the changes in the marketplace, which now clearly favors NetFlix and Redbox, as well as Video On Demand and online download sources. And that's really all it ever is at the corporate level; if you fail to predict the expectations of your customer, they'll go to someone who does. The move would save Blockbuster, once the titan of the home video industry, about $30 million a year. And frankly, it's a move the company should have made a couple of years ago when it became clear that NetFlix had a more convenient model for a lot of consumers. Blockbuster has tried to keep up, offering its own by-mail rental service, which is kind of like Microsoft making the Zune: Even if it works just as well as the iPod, everybody still calls that type of technology an iPod. NetFlix is the name you associate with that kind of business, and if Blockbuster copies it, it just makes NetFlix look that much stronger. There were other moves, too, like trying to sell movie memorabilia in an effort to get people in the stores, but everything Blockbuster tried added overhead and took away from the service with which it was most identified, and that's never a good idea, either. Now the plan is to steal the Redbox model and go with DVD kiosks. That has a better chance of success, in my opinion, because Blockbuster is gutting its physical locations by close to 1,000 stores and Redbox isn't quite to that tipping point yet where it's as commonplace as it will be. The goal is to have 10,000 Blockbuster boxes spread nationwide by the end of next year, at which point the number of rental outlets will be down in the 3,500 range. And you can probably read the writing on the wall from there.

Comments

[MYMHM]

They'd really have a better chance if they just bought out redbox while they still had the capital. Imaine if they combined some of their digital downloading with the kiosk model. Rent a disc, or plug in your ipod, to take the movie home.
They were late to the kiosk model too, so running into it now just legitimizes redbox...

[scott]

this is only the first phase, my best guess would be that 3 years from now the stores will all be gone. LOTS of commercial real estate in prime locations coming soon......

[Reality Check]

March 2011 --- Blockbuster's online mail program is now DOA. I and many have had 20+ movies in queue many of which were released to DVD/Blu ray weeks ago. The entire queue shows "unavailable" to "on order" with a few "very long waits" in between. Blockbuster customer service has absolutely nothing to say other than put more movies in your queue. So I did. I added a few more movies that are a year old. Result...."unavailable".

Blockbuster as a corporation has been on life support for a long time. The frustration is seeing Blockbuster does not have the customer respect nor courtesy to advise its online customers that they've pulled the plug while automatically auto deducting from your CC account the next months billing while making customer sit there and wait fore a movie that is never coming. IS THIS NOT SOME SORT OF FRAUD??? Well, I've pulled the plug on my account.