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Blockbuster vows to go after Netflix


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I'm thinking about getting netflix, for 20 bones a month, I think it's worth it. I hate BB, they suck balls, so I hope their plan fails, in which one would have to assume if they get 20% of revenue from their online site, how many users from in store BB memberships will stop using the brick and mortar stores? If it was 20% then the Brick and mortar division will take nose dive. . This will get interesting very quickly.

Blockbuster vows to go after Netflix

Wednesday, July 21, 2004 Posted: 1:15 PM EDT (1715 GMT)

   

            

  

NEW YORK (Hollywood Reporter) -- Blockbuster Inc. chairman and CEO John Antioco promised shareholders Tuesday that the video rental giant will take the fight to online rental rival Netflix Inc. when it launches its own Internet-based rental service this year.

While Blockbuster executives have in the past often shrugged off the competitive threat from Netflix and the significance of the online rental market in general, Antioco openly acknowledged its strategic importance at his company's annual shareholder meeting.

"Two million (customers) have spoken," he said, referring to Netflix's subscriber base. "We can't continue to allow our customers to erode away from us. We are not going to ignore these folks."

Antioco said current online renters tend to be affluent and technology-savvy, just like many of Blockbuster's customers, meaning that his company has likely been losing a sizable share of consumers to Netflix. Assuming that about 30 percent of Netflix users may have been Blockbuster customers, Antioco said fighting for online renters is "a significant opportunity" for his firm.

The CEO gave few further specifics on Blockbuster's online rental site, for which the company has been running a beta test with a monthly subscription price undercutting Netflix.

Antioco didn't say when the site will go live but hinted it will be sooner rather than later. "We will be launching when we're ready to launch," he said. "I'm comfortable that it will be long before" the previous guidance time frame, which had called for a launch by the fourth quarter.

While subscriber acquisition costs will be high over the first year, the online rental service will bring "significant profit beyond that," Antioco predicted, adding he expects Blockbuster's profit per subscriber to be above Netflix's.

Sources expect Blockbuster will not immediately be able to replicate Netflix's overnight delivery but will focus on getting DVDs to online renters within two days.

Among the matters approved at Tuesday's shareholder meeting was a proposal to adopt an amended and restated certificate of incorporation, which will facilitate a proposed split-off of Blockbuster from Viacom, which currently controls the company.

Details of an exchange offer that will help affect the split-off have not yet been decided, but Antioco suggested that the offer will happen around September. He said the goal will be to structure the offer in a way that is attractive to both Blockbuster and Viacom shareholders.

Antioco also said Blockbuster's board will explore how to create value for shareholders after the split-off with options including stock buybacks, dividend payments and investments in developing businesses.

Besides the online rental service launch, Antioco in a presentation outlined online and in-store subscriptions as a key focus for management. "There could be some upside to the whole rental market" because of subscriptions, he said, predicting that about 10 percent of Blockbuster's customer base and 20 percent of the firm's revenue could come from monthly subscriptions by the end of next year.

Asked whether Blockbuster's $24.95 a month in-store subscription pass compares well with Netflix's slightly cheaper online offer, Antioco said it is "a hell of a better deal," because his company offers unlimited numbers of rentals under the pass. While Netflix users rent seven to eight DVDs a month, Blockbuster's Movie Pass owners rent more than 10 a month.

Antioco said his management team also will focus on expanding its video game rental operation and building a DVD and video games trading business, as previously announced with customers getting store credit for selling Blockbuster a film title. Margins on this trading business could reach up to 40 percent, making it the highest dollar-margin transactions the company has.

Blockbuster stock ended unchanged at $14.30 on the New York Stock Exchange Tuesday

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Guest macboy

No question netflix is the leader and they have got it down to a science. Blockbuster is taking way too long. Unless they allow their card holders to automatically opt into a mail delivery system without having to fill out a new application, they are going have some very unsatisfied customers.

Now, of course I have to throw in a Mac twist. Check out this little app if you are a Mac user and Netflix subscriber. Supposedly makes the whole experience even easier. It has received fantastic reviews:

http://www.thelittleappfactory.com/software/netflixfreak.php

Unfortunately, with the ridiculous proliferation of movies and tv shows available on the internet, even netflix will eventually take a hit. Speculation is that netflix is helping contribute to the problem. People are renting the DVDs, ripping them, and returning them at a fast pace to get more, and then posting them on the internet. $22 a month for unlimited DVDs is a bargain, but free is even better for some people.

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Guest endymion

Wow neat, Macboy, thanks for the pointer.

I'm also not at all sad to see Blockbuster deal with some competition issues.

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Guest web_norah

No question netflix is the leader and they have got it down to a science. Blockbuster is taking way too long. Unless they allow their card holders to automatically opt into a mail delivery system without having to fill out a new application, they are going have some very unsatisfied customers.

Now, of course I have to throw in a Mac twist. Check out this little app if you are a Mac user and Netflix subscriber. Supposedly makes the whole experience even easier. It has received fantastic reviews:

http://www.thelittleappfactory.com/software/netflixfreak.php

Unfortunately, with the ridiculous proliferation of movies and tv shows available on the internet, even netflix will eventually take a hit. Speculation is that netflix is helping contribute to the problem. People are renting the DVDs, ripping them, and returning them at a fast pace to get more, and then posting them on the internet. $22 a month for unlimited DVDs is a bargain, but free is even better for some people.

dude you're definitely a Mac freak...

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Guest klit

Why not get the 25 a month plan from blockbuster instead? I pay 25, have unlimited rentals during that month like netflix with no late fees but don't have to wait for dvds to come in mail. I signed up for this a month ago and its worth the 25 a month.

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Guest shannon_coolj.

Blockbuster sucks.

You can pay 25 bucks a month for their plan but you can pay $20 from Netflix and never have to walk into a store and wait in line.

Also, after you watch the movie at Netflix you rate it, so they always have recommendations.

It's so much easier...I love Netflix 8)

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Two things, the CEO of BB was bsing about the unlimited rentals also BB says clearly that most of their service will be 2 day service unlike NF 80% single day service.

however for the instore 25 dollar program, you are limited by what the store can hold whereas NF has 20k workth of movies to rent.

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Guest trancepriest

Nothing beats free tax payer funded DVD's... hint your local library. I get most of my DVD's from the main library in downtown Fort Lauderdale. Sometmes I even bring my notebook and watch them there. Believe it or not they have all the latest movies and old school classics. Their foreign movie collection is in the hundreds. The trick is to place your movies on hold online.

If you must have the latest movie as quickly as possible then blockbuster or netflix is the way to go. I've noticed the library is about a week or 2 behind the stores.

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Guest Clarisa

Nothing beats free tax payer funded DVD's... hint your local library. I get most of my DVD's from the main library in downtown Fort Lauderdale. Sometmes I even bring my notebook and watch them there. Believe it or not they have all the latest movies and old school classics. Their foreign movie collection is in the hundreds. The trick is to place your movies on hold online.

If you must have the latest movie as quickly as possible then blockbuster or netflix is the way to go. I've noticed the library is about a week or 2 behind the stores.

a true penny pincher ;D ;D ;D

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Guest LeVeL

You know Trancepriest now that you mentioned that about the Main Library in Downtown Ft. Lauderdale, just last week I walked my happy ass one block and decided to take out a bunch of CD's from the Library and I burned me an awesome Cd with nothing but Brazilian Jazz. Its true the library in Downtown Ft. lauderdale got all the shit.......you just have to look.

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Guest trancepriest

I only wish they had publicly available ethernet ports or wireless internet there. Making a push for that to happen. The next time you go.. fill out a recommendation for that... help to support my penny pinching bohemian lifestyle... 8). And yes the library as greatly added to my jazz and classical music collection. Definitely beats blockbuster.

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