Why is Blockbuster Suffering? Simple, Says CEO Jim Keyes. Because the Movies Suck.

By Robert Wilonsky Fri., Mar. 20 2009 at 1:31 PM

Categories: Biz, From the RTF Dept.

Jim Keyes has a point. Because would you really wanna go to Blockbuster to rent Punisher: War Zone? Did not think so.

Shortly after Dallas-based Blockbuster reported a quarterly loss of $359.7 million yesterday, CEO Jim Keyes hopped on a conference call with analysts to reassure them that, look, all's not lost. And while there are myriad reasons for the current state of hurt ar 1201 Elm Street that has led to shares worth 80 cents today -- competition from Netflix, which is currently trading well above the $41 mark, and the set-top box's failure to launch so far -- Keyes had some not-especially-kind things to offer to the folks who stock Blockbuster's shelves. Seeking Alpha offers the earnings-call transcript in which Keyes says:

We think the single biggest driver in the current marketplace the last few months has been title strength and this week is a classic example. Box office is down 56% this week versus the previous year. I think the titles say it all. This week we are proud to offer Punisher: War Zone and Elegy, which are good movies but stacked up against last year's Enchanted, Atonement and I Am Legend, I think that kind of says it all. We have been facing this the last couple of months. Good movies but not great box office hits that we have had. At the same time we have seen unprecedented theatrical strength. As you know this is great for our business in about three months. When it is going on it represents a draw in particular on Friday and Saturday nights for those people who decide to go to the theaters so see Slumdog Millionaire, Watchmen, Paul Blart Mall Cop, and so that has had an effect on us for the first quarter as well.

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Mmmm, a few months ago I’d say you were on the mark, but slow down. Since DISH Network bought out Blockbuster it’s a whole new ballgame…as a DISH customer/employee I can tell you right now DISH is offering a free three month trial to Blockbuster Online for new customers. Check it out here…http://goo.gl/wuMrN
we should have seen it he ran 7 eleven down why not bbv.
It is management at Blockbuster that sucks, not the movies.
4 years of that mess running blockbuster I ran a store that closed down in march and I must say the pricing and selection is crap and a big problem.... I was a store manager also..... What a waste of my time thanx to Mickey McFarland!!!!!!!!!!!
herb let me tell as a former store manager it used to crack me up how employees misplaced movies ona regular basis and how many people like you came in saying they returned and then when we do inventory every 3 months the movie would always seem to pop up. The morale of Blockbuster employees was in the toilet when i left and i cant imagine its any better now, They never have and never will treat there employees on the front line with any respect. Im glad i bailed when i did
If you hate Blockbuster, check this out: <a href="http://www.gotarant.com/rants/Rant.aspx?id=75">View my rant </a>
Don't use Blockbuster.
well, at least he didn't blame it on torrenting and pirates :) TPB FTW
one link, people: http://www.artemiseternal.com watch the video there and rejoice "6 companies control all the media you are seeing..." BUT THEY DON"T CONTROL THIS.
Why aren't they dead yet. They had terrible pricing until they got some competition, limited selection all lumped into 3 or 4 category's that didn't reflect the content at all. Come on Erotic movies in with Drama. Senseless. The customer service was bad and the late fees, my god the late fees where outrageous. Thank you Netflix. Thank you! You actually brought good into this world. Blockbuster-->hell.
i'm seriously surprised that blockbuster is still around. WHY does any person need to go out to blockbuster to rent dvd movies and/or games, when they are ALL on the internet already? whether you choose to watch a movie via netflix, or download it off of the internet so you can burn it to a dvd to watch on your dvd player, or rent it online, WHY go to blockbuster? someone needs to put blockbuster out of its misery. will it mean that more people will be out of work if that happens? of course, but it's inevitable. i seriously do not see blockbuster lasting too much longer.
Jim Keyes is the same CEO from 7-Eleven that got kicked out a few years back. And what did he do? He hired some of his pals from 7-Eleven to run Blockbuster.
Blockbuster is dying, there business model is too antiquated to sustain in today's market...Netflix beat them first to renting through the internet and beat them again with streaming movies...This is why Blockbuster sells at $.80 and Netflix is at $41...It's the level of innovation at the top of the ladder that separates the company. Blockbuster had a good run pushing the mom and pop video stores out of the picture, but now it's Netflix' turn to push BB out of the picture...
Things come and go. Blockbuster will die out. Nortel will die out. Polar bears will die out. Just because something exists now doesn't mean it has to exist forever.
Blockbuster is dying, there business model is too antiquated to sustain in today's market...Netflix beat them first to renting through the internet and beat them again with streaming movies...This is why Blockbuster sells at $.80 and Netflix is at $41...It's the level of innovation at the top of the ladder that separates the company. Blockbuster had a good run pushing the mom and pop video stores out of the picture, but now it's Netflix' turn to push BB out of the picture. R.I.P Blockbuster
wow. same morons posting nonsense, don't forget to completely ignore the fact that Jim Keys has turned the company around, 4 consecutive positive earnings quarters, same store sales up 6% in 2008, 4Q earned .40 cents per share, not .25 estimated, beat by .15, debt elimination is job #1 for the new CEO which is why nobody even knows about the good earnings... Can you rent games at netflix? No? go to blockbuster. Games by mail coming to total access program this year, bbi has the streaming download and kiosk BS online but all of you self rightous technophiles think streaming is going to take over tomorrow. I've been listening to the debate for 10 years and guess what? 80% of people don't have a clue, but they can pop a disk into a box. BBi is global, with 5 billion revenue a year. The stock has been naked shorted to .70 cents, so ignore that too and but nflx stock at 40 bucks. unreal. thanks for proving again most web posters are clueless morons. too damned funny.
OMG, you total idiot. Yeah, people everywhere are participating in the wholesale abandonment of movie watching. You don't think it might have had anything at all to do with your terrible instore experience, taking on too much floor space in high-rent zones, refusal to rent more than 2 video games at a time, horribly unmotivated "customer service" employees or your company's utter refusal to accept the changing face of content delivery? No? Then your organization deserves to die.
Blockbuster is a great description of how not to do business. I worked as a team lead at a hastings for almost 2 years and they had a very reasonable late fee policy: you were charged in proportion to the cost of the rental at normal price. If the rental was $2 for a week, the late fee was 25 cents for each day it was late. There was no hidden BS: if you kept the movie longer, you didn't get charged anything that can be considered unreasonable. I went to a blockbuster and hollywood video found out they both suck not only with late fees, but prices in general. I laugh at blockbuster going under: they deserve it.
Movies are not that good, but also more people are downloading instead of paying to go watch it.
It kills me how rich people complain about how much money they are losing. At least they have a chance to rebound and can afford to take some risks that would costs the rest of us our houses and more. This is just part of life, what goes up must come down, they will rebound or get bought out. Hell, in the end, they will still be rich. - Shockadalite http://doitscared.wordpress.com/
"I just want to throw something out there for you guys. you're saying you pay $32 a month for 5 movies out at a time from netflix...blockbuster offers a 29.99 movie pass for unlimited rentals IN STORE. so you may need to go back a couple times a day, but you're paying less and you have a larger selection that you could do." Oh Yeah? What about all the time spent on driving and wasting gas to get the same amount of movies you could get on Netflix without moving from the comfort of your own couch? Que'ed. Netflix>BlockBuster. Period.
they are competing with red box and netflix. hence blockbuster online, and 99 cent movies. atleast in my area (the dallas area, like andy). does it suck for you that you don't have it in your area? yes. the 7 day grace period was actually hurting blockbuster, which is why they're switching to lower prices and giving the choice of how many days. that does mean additional daily fee's, but that's on your own terms. but, to each his own. you want to know more? instead of bitching about it on a news website, maybe you could call your local blockbuster and tell them what you think. haha.
So Lourdes, how's it feel to get caught stealing a soda and get shit canned? Really, you developed a business model that proved to be the wave of the future and you've taken the time from relaxing on your private island to post here? Oh wait you're full of shit. Blockbuster is failing for a myriad of reasons and none of which were articulated in these comments. I suspect most of the morons posting had a movie under their car seat for 6 months and can't understand why they should pay for it.
So Andy, Nikki, How's it feel to work for Blockbuster these days? You know way more about the fee's and calsl than the average consumer. I know because I used to work for Blockbuster. Operative phrase "Used to". Blockbuster is simply a dead company waiting for a coffin. I know this because they don't want to innovate at all. And I know this because I handed them personally a business plan exactly like RedBox and Netflix 10 years ago and they did NOTHING with it, thinking wrongly that I, a store employee at the time, couldn't possibly know what I'm talking about. Course, I left them after pointing out the numerous numerous ways they were scamming customers as well and challenged them to do the right thing, and this was after they had already scammed me out of oh 1200 dollars in wages. Blockbuster doesn't care, and the public knows it. Blockbuster doesn't want to compete, they want the old days, and it ain't happening. Blockbuster cannot and will nto face the fact that someone beat them to the punch because they couldn't be bothered to listen to employees. Oh and they also edit their movies to make them family friendly, so.. that might have something to do with it too, because you know the public, they want to see ALL the movie they rented.
Agreed, the movies lately do suck! RT www.online-privacy.pro.tc
Wow that is really cool stuff dude! RT www.online-privacy.pro.tc
There is only one reason that Blockbuster is failing. Blockbuster sucks ass. Unlimited movies from Netflix = $7/month ONE movie from Blockbuster = $5 Death to Blockbuster!
The best movie I have seen in a long time was Watchmen. It was the adaptation of a VERY well written Graphic Novel. It was NOT adapted from a 1623+ series of comic books (with 1/2 of them used as filler). Content is key. It actually made me *gasp* process and analyze the content. I wasn't force fed "funny" animals, immature toilet humor, 200+ unrealistic explosions coupled with 3 lines of dialogue, or a remake of Forest Gu-- I mean an artsy film featuring Brad Pitt.
I for one wouldn't pay more than Redbox prices for some of the excrement secreted by Hollywood these days. Most movies churned out these days would barely make for a [failed] pilot on the CW. Contrary to popular belief, content is what makes a movie great-- not special effects/explosions/obnoxious teens/potty humor.
Genice, they DO call you. It's all automated. How hard is it to remember to return a movie? I used to work for two different movie rental stores so I've heard every excuse. There are exceptions, and said balances are cleared. If your local store manager won't take care of it, call corp. Explain what happened. They'll take care of it. They won't punish the Store Manager for not removing it, so don't think that calling will provide some sort of self satisfaction. A lot of people rant about how Blockbuster charges you full price for the movie.. but that's only after you've kept it not only for the 2-day or 7-day rental period. You've kept it for the full period, PLUS 30 days. Thats a 32-37 day period in which you could have taken a walk, asked someone to take it, even MAILED IT TO THE STORE (people go on vacation sometimes and do that). It's a movie RENTAL. If Blockbuster didn't do this, how else can they know that their movies will be returned? There is no "trust" in retail. There's always the one customer who screws it up for everybody else. Blame it all on the first person to ever not return a movie.
I just want to throw something out there for you guys. you're saying you pay $32 a month for 5 movies out at a time from netflix...blockbuster offers a 29.99 movie pass for unlimited rentals IN STORE. so you may need to go back a couple times a day, but you're paying less and you have a larger selection that you could do. another thing, when it comes to price. they're beta testing a new way to make the movies cheaper on your own terms. 1.99 or 99 cent movies for one day, or 2.99 or 4.99 movies for 5 days. every thing is cheaper that way if you know you'll return in the next day, or a day after that. One down fall of redbox is the don't update it as frequently, blockbuster may have crappy titles every week, but they're adding to their collection that they already have. they're also releasing a new modem type thing that lets you get all rentals to your tv through the internet, kind of like the xbox and netflix, just without having to own a 360. At least consider all these things.
Future is shared media, so this kind of business will be vanished soon...
It is true! Blockbuster is not the only entity suffering from crapfest being churned out by Hollywood. What is up with remakes of classics? Doesn't these numbnuts executive know what makes a classic a classic was the time, era and actors/actresses. You cannot replicate these.
warzone was fucking awesome. fucking awesome.
If they go out of biz i'll have to find another parking lot
Red Box is killing them.
It's called redbox bitches....
If by "title strength," he actually means "Red Box" ... then he's right.
My head explodes at the thought of anyone thinking Punisher War Zone was "good".
It's the cost stupid. I pay about $32 a month for my Netflix account which gets me 5 DVDs at a time and an unlimited amount per month. I can watch roughly 30-40 films a month. If I tried to rent that many films a month at Blockbuster it would cost me nearly $160. I save $130. Plus I can download films to my computer or TV for no additional charge. Plus I don't get late fee charges. Blockbuster will soon go the way of Hollywood Video.
i vowed never to return to blockbuster after they turned my account over to a collection agency. sure, i was about 3 weeks late returning a film, but couldn't they have called me with a friendly reminder to return the film? you know who does call you with a friendly reminder? Premiere Video.
Ridiculous fees, time limits, hideous customer service, inconvenience...great business plan....
blockbuster> the titles are crap! >:( netflix> lol
Blockbuster, your old road is rapidly fading. Digital distribution is the new wave, embrace it.
I should probably have clarified by saying that "tons of bad movies have flown off the shelves in the past".
What a ridiculous statement. There are tons of bad movies that fly off the rental store shelves. Like Keith says, it's price and the ability to watch movies on-demand via digital cable or, increasingly, via computer. It's also the convenience factor of not having to drive to the store.
Could it have anything to do with your prices and fees? No couldn't be. Great idea to try blockbuster access, but a case of too little too late. Plus, digital cable gives you the same movies for about the same price. Good Bye Blockbuster! You shall go the way of the 8 track.
It probably doesn't help when Hollywood is pumping out crap like A-Team and MacGuyver remakes. There is no originality in Hollywood anymore. Everything is a remake or comic book adaption.
It's always somebody else's fault, right Jim?