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Edward R Murrow

Isn't Neil Hunt the Netflix Village Idiot that said something about BBI going backwards with TA? BBO added almost twice the number of customers that NFLX did last quarter. Looks like customers love BBOTA so hows's that for moving backwards? Way to go Nostradamus.

leonardodicrapio

Ed, you are the biggest proponent of VOD, yet you don't think Blockbuster Total Access is backward-looking. If Blockbuster had a half billion dollars of cash (like Netflix) instead of a half billion dollars of debt I might give them a fighting chance (to be a real significant long-term competitor to Netflix). And I say this because if they could leverage their stores to get into downloading it might work.

Blockbuster has no stake in downloading except for some vague promises of agressively moving into download (whenever they see it is fit to do it). Netflix has Watch Now for all its customers. Blockbuster Total Access hasn't slowed Netflix down yet (about 1 million new Netflix customers since Total Access was introduced).

Blockbuster Total Access may actually accelerate the closing of some video stores, which may actually be beneficial to both Blockbuster and Netflix. Of course Netflix is getting the free piggy-back ride.

leonardodicrapio

Or should I just call you (Ed), defender of Comcast's VOD and Blockbuster's Total Access and attacker of Netflix? By the way, I did cancel my Comcast services and have Verizon FiOS now. And I couldn't be happier now that I am paying less. And I didn't have OnDemand with Comcrap even though I was paying Comcast more than I am paying Verizon. So do you have Showtime (Sleeper Cell) on other threads but HBO (the Sopranos, Rome, etc.) on HackingNetflix?

"If you don't like what Comcast has to offer, completely cancel the Comcast service and get your DSL from SBC/Yahoo, Verizon, etc."

http://talkback.zdnet.com/5208-11423-0.html?forumID=1&threadID=29390&messageID=547764&start=-1

gir

From a comment attached to that story:
"Anyway, I'm pretty much fed up with all the cable/telecoms controlling my web access and my web access speed by forcing packages on me that I don't want or need."

I couldn't agree more. I'm glad my city is putting in municipal fiber. Funny thing: as soon as the fiber initiative started in earnest, my telco dropped their prices by almost 25%. Local cable is still playing the bundle game though, and oddly doesn't seem to be the little bit interested in competing. Digital cable, internet and phone bundle would end up costing over $160 a month once past the introductory period. My telco, partnered with Dish, offered the same for about $135, and that was before the price decrease. The final price on municipal fiber hasn't come in yet, but my estimate is I'll be able to get the same for under $100 - likely well under. If I opt for local channels only, it could be as low as $60 a month. I'm hoping they offer channels ala-carte.

leonardodicrapio

I also love one of Ed's other comments at ZDNet:

"BTW, if you're still a Netflix customer rather than a Blockbuster Online + Total Access customer then you're not very smart with your money."

I guess there are almost 7 million Netflix customers who are financial idiots. Good argument, Ed. Bravo!

leonardodicrapio

Hey, Ed, don't you realize that Blockbuster is the company that at least 47 out of 50 states (94%) sued because of the "No Late Fees" campaign.

http://www.ago.state.co.us/press_detail.cfm?pressID=16

And I've gotta tell you the markings on the movies in their stores just don't make a ton of sense. I mean why do they have 2-Day Rentals when you can keep them for 9 days before getting hit with the $1.25 Restocking Fee?

And then the movies were due by Midnight and then they changed it until Noon. When I tried BBOTA I went to the store that was closest and happened to be more convenient during the time period of my trial, but I have another store that is only marginally further away (which I never went to during the trial).

I always kept the receipts to keep track of the return dates (and if I would've liked it enough I would've kept the receipts to keep track of which store I rented movies from). I can just see the dilemma -- I have to return a movie at one store today and another one at the other store tomorrow. Are you getting how it might not be convenient for a lot of people to spend their spare time trekking to a store to exchange and return DVD's?

leonardodicrapio

Hey, Ed, us Netflix customers are so bad with money because we don't spend:

1) Approximately 20 miles per month (assuming 4 exchanges/returns which are overlapped @ 5 miles roundtrip each) of extra wear on our cars (an extra 240 miles per year). Wow, that is just under a thousand miles in only four years.

2) $3 of gasoline (assuming 20 miles per gallon and $3 per gallon gasonline) or $36 per year.

3) Approximately an hour per month of our spare time (assuming 15 minutes per roundtrip to store) which is 12 hours (a half a day) per year.

superfunhappy

Oh Leo, not to worry. You see "Ed" is a simplton. In this case he has chosen to ignore any negative aspects of Blockbuster's program from an investor's point of view, so that he can argue that number of subscribers = success.

BBTA is great from a value perspective as long as your ok going to the store again which clearly, at the current pricing, many people are. From a business perspective it is not sustainable (cannibalization of + losing money). I used to own BB stock when they started BBTA I sold it a little while back when I realized they were having a "fire sale" on international assets to fund their online efforts.

McDahling

Do you guys want to steal his credit too? You seem so harsh. But I'm happy that you vocalized what I was thinking, that BB isn't going to make money from TA. It seems WAY to giving.

gir

Nah, they're not being harsh. They're just goofin on him. [goofin = license to say anything you want.]

type-cast

I think they can make TA profitable, without cannibalizing their subscriptions. All they have to do is set down some limits, esp with the 2-day titles. Say, one a week or one at a time, and $1-2 for any beyond that. Hiking prices WILL cost them a large percentage of customers, who are not willing to pay extra, period. But right now, they're cannibalizing store profits and selection. I used to have BB Rewards, but couldn't justify renewing it when I can get 3 or more movies a week free on Total Access. I've returned every movie I got from them to the store for a free movie, since the program started. But I don't care much about new releases. I'm the ideal user, but many people are the worst-case scenario grabbing the hot new releases on Tuesday and keeping them for 9 days. They need to place some limits on the 2-day titles and also cut the grace-period on them to like 1 day.

leonardodicrapio

type, you seem to forget that:

1. blockbuster online had one rental per week "free" in-store (or four per month which is almost the same thing) and no-one cared.

2. blockbuster has a rewards card that can get you a catalog title per month for less than $1 per month, and no-one cares.

i don't think blockbuster will try to set a limit for two-day titles (that is too much like #1). and i definitely don't think they will ever cut the grace period on two-day titles, or the state attorney generals will be in the ring for round two with blockbuster.

type-cast

They don't need to limit 8-day rentals. That would be pointless. They are collecting dust anyways. They can change the grace period to whatever they want. It's just a $1.25 fee at that point. But it discourages folks keeping them for a week and brings in revenue. Why'd you say "no-one cares"? Clearly, some people care. Their average member supposedly gets 2 Total Access rentals a month. They're losing big on just a few pigs. Setting limits isn't going to cause average users to quit.

leonardodicrapio

"Why'd you say 'no-one cares'?"

In the past, Blockbuster Online offered coupons to its subscribers for "free" movies in the store weekly (or about 4 times per month). Judging by the lackluster adoption of Blockbuster Online prior to Total Access, I would say no-one cared about a free rental per week.

"Their average member supposedly gets 2 Total Access rentals a month."

John Antioco said two months ago at the conference call after BBI's fourth quarter (annual earnings report) that 70% of Blockbuster Online Total Access customers come into the stores about three times per month (and I would assume that this averages out everybody who comes into the store between 1 and 5 times per month). Those customers could be exchanging anywhere from zero to three DVD's.

If you assumed the average customer (of those 70%) exchanged between 1.5 to 2 DVD's per trip to the store, and the other 30% (for this argument I will call it a little more conservative 1/3 or 33.3%) exchanged zero movies per month: the average BBTA customer would be getting 3-4 movies with free exchanges per month, which is a lot more than you are assuming.

You could argue a little about my numbers, but I didn't take into account the approximately 5-20% of BBTA customers that come into the store more than 6 times per month (and exchange about 6-15 DVD's per month --my best guess is that there are only about 10-25% of BBTA that never use the store for exchanges). These heavy users would prop the average up even higher (to maybe 4-6 DVD's exchanged per month).

Now that being said again that is based on what John Antioco said two months ago. The number of customers who come in around 3 times per month may be closer to 80% by now.

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