Seeking Alpha has posted a transcript of Blockbuster's Q3 2007 Earnings Webcast.
Blockbuster CEO & Chairman, James W. Keyes, on high-volume Total Access customers:
A second move was to modify the offerings under our Total Access program to provide better value for by-mail only customers while also capturing greater returns from those seeking unlimited access. This was a conscious effort to prune the tree and in other words, we were willing to walk away from some of our subscribers, those at the far end of the usage scale who are not willing to pay a higher price for unlimited free exchanges.
One of those customers in fact was quoted in Newsweek saying, “in the nine months since I joined Total Access,” he said, “over 200 titles have been mailed to me. That is 200 titles that I returned to the store and got a freebie off of. It worked out to about 36 cents per DVD which means they lost a fortune on me just on postage fees.”
Well, when we read that we challenged his math a bit; it is not exactly correct but he does certainly raise a good point. And the net result of the quarter, after our changes, was in fact a decline of about 500,000 subscribers, some of whom were in that category and whom we were happy to see move to the competition.
Thanks to Matthew for sending this in.