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Blogger

Price increase. B&S. The rats will be bailing out of this sinking ship.

gir

"...the costs associated with the program affected our profitability"

Can you say understatement?

It also looks like the hope for cross sell from in-store visits isn't happening ("merchandise sales declined to $285.2 million from $299.8 million").

leonardodicrapio

blockbuster lost over $100 million if you back out the sale of gamestation (which was almost $80 million). ouch.

my best guess is that blockbuster is going to lose $50 million in july. these price changes aren't taking effect for its existing customers until august or september, and i don't think the price changes are going to do enough to slow down blockbuster's self cannibilization of its existing in-store customers. so the major losses should continue on into next quarter.

i don't see blockbuster making their lender's earnings before interest taxes, depreciation, and amoritization (ebitda) year-end (for the year ending 12/31/07) requirements (and that is if the gamestation sale is INCLUDED in ebidta).

q107 ebitda is $30 million; q207 ebitda will probably be around $60 million (including GS sale). i figure q307 ebitda will be negative (assuming ebidta for july alone is around -$20 million). blockbuster is going to need $100 million of ebitda in q407, and i don't see the turnaround happening that quickly.

Edward R Murrow

You know, the Motley Fool used to be pretty cool but now it's just a pump and dump website for their bloggers. Why does it seem like every negative article about BBI and every positive column about NFLX on the Motley Fool is written by someone who owns NFLX stock? The Motley Fool is far from fair and balanced. In fact, Motley Fool sucks hard.
http://www.fool.com/investing/general/2007/07/26/blockbuster-feels-the-burn-fool-by-numbers.aspx

gir

Why am I suddenly thinking about pots and a kettles?

leonardodicrapio

One of my favorite quotes from the conference call:

Larry Zine: "This was the worst June in three years..."

And of course the executives at Blockbuster cannot seem to figure out that it did not have nothing to do with Total Access. No, it had everything to do with Total Access.

leonardodicrapio

James Keyes:
"it's actually an enhancement to the current program" (because they are allowing dvd-by-mail customers to exchange their mailers for $1.99)

by mail used to get a free monthly coupon -- now they get none. so it is an enhancement that they can exchange a mailer for a movie for $1.99 when before they got one free per month? if the by-mail wanted to exchange mailers they wouldn't be taking the one dollar discount to forgo any total access benefits.

leonardodicrapio

analyst: "can you give us a sense of what the samestore domestic instore rental revenues were minus the online revenues (the total access line)?"

blockbuster executive: "if i had to give you a number for the in-store business i would say down just over 10%."

and the executive went on about how you shouldn't look at that number in a vacuum because they are gaining total access hybrid customers.

same blockbuster executive: "july was not strong in terms of product flow."

lose over 10% of your profitable customers. gain unprofitable total access customers. net loss in my eyes.

Edward R Murrow

"Why am I suddenly thinking about pots and a kettles?"

Because it's time for you take your shoes off, waddle into the kitchen barefoot and start doing dishes?

gir

Hey, that was actually fairly witty.

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