Davis Freeberg on Blockbuster's New Direction

Davis Freeberg weighs in on the new initiatives by James Keyes at Blockbuster, From Rental To Retail - Blockbuster Begins Evoloution Towards New Rental Paradigm.

There is no way to know for sure, if any of these initiatives can save Blockbuster, but I do believe that Keyes is making the right moves towards securing the long term future of the company. While I may have written off the video store, I’m not ready to call the end of retail and I’m impressed by Keyes focus on improving revenue per square footage, instead of being distracted by the internet. It’s the right move for Blockbuster to make and one that marks the divergence of the Netflix vs. Blockbuster paradigm. With rental revenues set to eventually expire, Blockbuster is smart in positioning themselves to take on other retailers, where they have an advantage. By making these changes, it shifts the battle to Blockbuster vs. Circuit City, Best Buy and Game Stop and this is a business model that should make more sense to Blockbuster’s investors.

What do you think of the new direction at Blockbuster?

Comments

[StepForward]

While retail ambition seems admirable… It also seems that Blockbuster has already dabbled and failed with some retail focus endeavors…. What will be “so” different with Keye’s new ideas? Aren’t some of these ideas things Blockbuster has already tried or tested in the past?

• Directv – Kiosks formerly in Blockbuster stores (Did anyone buy a Directv system at BB? Were the employees trained to sell it?)

• Radio Shack Mini-Stores – Formerly in select Blockbuster stores (These seem to have disappeared)

• Game Rush – Select stores already have/had specialized gaming store-in-store with in store demo unit and consoles for sale. (Didn’t appear to take off like they thought)

On with the show! Should be interesting to see what happens..

[FredFredrickson]

Personally I don't like the idea that they're not focusing on me. I have the Total Access plan. now they've realized I'm losing them money, they don't care.

Way to burn a bunch of customers who almost forgave them for their other hoaxes (end of late fees, in stock guaruntee, both huge hoaxes). LAME!

Everybody's doing it too. I use Yahoo Music Unlimited, and guess what, they're slowly choking off the few users they still have cause, it's not making them money. :-( Damn.

[Old Timer Too]

Blockbuster will have to become competitive and make it very easy to make purchases. A recent experience suggests this is not the case: I exchanged a couple of films for Total Access envelopes and wanted to buy the films. I was told that I had to wait and let BB charge my credit card when I didn't return the films. They couldn't actually make the sale, but I had to become a thief first, essentially keeping what was not mine, in order to pay for it.

That makes a whole lot of sense... NOT!

Eventually, Keyes may get the thing turned around and we'll have a bunch of BB 7-11 stores! Time to install them slurpee machines... Hey, I'd buy if my local BB had one installed. I'm not joking - I was in a BB on my home from work and also needed to pick up a gallon of milk.