Dear Shane Evangelist, VP Online Division

[Shuke]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year. I think that may have been a bit optimistic. You have not come close to passing them and in fact the gap between Netflix and Blockbuster Online subscribers has widdened under your leadership.

As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

Sincerely,

Shuke

[johnlow71]

hahahahahah wow somebody concerned a little too much. who are you and why do you giva a shit:)

[rk237]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year. I think that may have been a bit optimistic. You have not come close to passing them and in fact the gap between Netflix and Blockbuster Online subscribers has widdened under your leadership.

As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

Sincerely,

Shuke

I think I'm going to cry now.

[hippieness]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year. I think that may have been a bit optimistic. You have not come close to passing them and in fact the gap between Netflix and Blockbuster Online subscribers has widdened under your leadership.

As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

Sincerely,

Shuke

I am sure he comes on here and reads these forums all the time too.....

[URBAN_COWBOY]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year. I think that may have been a bit optimistic. You have not come close to passing them and in fact the gap between Netflix and Blockbuster Online subscribers has widdened under your leadership.

As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

Sincerely,

Shukewow, this is much more effective than say, sending it personally. I would gather that either A. you're too chicken shit to send it to this person or B. you're actually dumb enough to believe this will be read by this person here or C. you are just making a really weak attempt to be funny and it just backfired on you.

[zooworker]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year. I think that may have been a bit optimistic. You have not come close to passing them and in fact the gap between Netflix and Blockbuster Online subscribers has widdened under your leadership.

As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

Sincerely,

Shuke
Whats the matter , lost the phone number?

[moonprism]

Netflix is kicking our ass? You're shitting me!

[sar94pga]

boo fuckin hoo

[Shuke]

wow, this is much more effective than say, sending it personally. I would gather that either A. you're too chicken shit to send it to this person or B. you're actually dumb enough to believe this will be read by this person here or C. you are just making a really weak attempt to be funny and it just backfired on you.


D.
Just stating the facts.

[DraconianSM]

D.
Just stating the facts.

State the facts accurately. BBV Online reached 2.2 million by end of 4th quarter '06.

BBV Online has picked up momentum since November launch of Total Access and the gap between Netflix and Blockbuster is starting to close. Blockbuster's stock has almost doubled since TA.

[Shuke]

State the facts accurately. BBV Online reached 2.2 million by end of 4th quarter '06.

BBV Online has picked up momentum since November launch of Total Access and the gap between Netflix and Blockbuster is starting to close. Blockbuster's stock has almost doubled since TA.

2.2 million versus 2 million? Sorry I was way off in my facts. The article I read said BB Online had 2 million paying subscribers at 12/31/06. I have no idea at the accuracy of that article. Your figures are close enough that I'm willing to go with your 2.2 million number and the fact remains that they are still being close to tripled up by Netflix.

Total Access will be just another in the long line of failed attempts to rally customers like Blockbuster has tried in the last 7 years. First it was DVD Trading, then Game Rush was going to save everything, then came the Game and Movie Passes, then BB Online, then End of Late Fees. They all failed.

Blockbuster fails to concentrate on the one area that could actually help them. Read through any of the topics here and you can see what that area is...

[johnlow71]

but yet theres still millions and billions of customers zzzzzzzzzzzzzz

go play with your barbies kid:)

[sar94pga]

2.2 million versus 2 million? Sorry I was way off in my facts. The article I read said BB Online had 2 million paying subscribers at 12/31/06. I have no idea at the accuracy of that article. Your figures are close enough that I'm willing to go with your 2.2 million number and the fact remains that they are still being close to tripled up by Netflix.

Total Access will be just another in the long line of failed attempts to rally customers like Blockbuster has tried in the last 7 years. First it was DVD Trading, then Game Rush was going to save everything, then came the Game and Movie Passes, then BB Online, then End of Late Fees. They all failed.

Blockbuster fails to concentrate on the one area that could actually help them. Read through any of the topics here and you can see what that area is...

all i hear is blah blah blah. what i do know is i happily spent my bonus that all the total access customers (activations and exchanges) gave me.

[Shuke]

wow

that is all

[johnlow71]

exactly sar:)

[hippieness]

Hey Puke, you stupid ass clown, did you take into your awesome factoring abilities, that Nextflix launched it program in 1997 while Blockbuster didn't start their online services untill 2004. That's 7 years that Netflix has been building customers online before Blockbuster. I think that Blockbuster going from 1.5 million to 2.2 million subscribers in the last quarter of last year is a pretty big jump. I think you have too much faith in your lovely Nexdix.

[Shuke]

all i hear is blah blah blah. what i do know is i happily spent my bonus that all the total access customers (activations and exchanges) gave me.

Hey Puke, you stupid ass clown, did you take into your awesome factoring abilities, that Nextflix launched it program in 1997 while Blockbuster didn't start their online services untill 2004. That's 7 years that Netflix has been building customers online before Blockbuster. I think that Blockbuster going from 1.5 million to 2.2 million subscribers in the last quarter of last year is a pretty big jump. I think you have too much faith in your lovely Nexdix.

Netflix actually launched in 1999, not 1997. It was 2003 when John Antioco called online rentals a "niche market." Maybe if he hadn't thought that, BB Online wouldn't be getting crushed right now.

In 2004 when BB Online started, Netflix had less than 2 million customers.
In 2006 alone, Netflix added more customers than BB Online has in its existance.

And no, I don't care about your measly bonus. Congrats on getting your first bonus in 6 years.

[whorehoppin]

First it was DVD Trading, then Game Rush was going to save everything, then came the Game and Movie Passes, then BB Online, then End of Late Fees. They all failed.



hmmm...

First it was trading?? I think it went more like this:

Game Rush
Movie/Game passes
Trading
Online
End of Late Fees
Total Access

don't forget Rewards was #1

how have any of these failed? You can say that Blockbuster lost a lot of money, but what rental company didn't lose money during that time (except Netflix which only rents online)?


I've gotten a bonus every quarter since they started giving non-SMs bonuses - that's about 5 quarters since they started it last year.

[sar94pga]

wow

that is all

do you honestly think you are the first person to post netflix vs blockbuster nonsense on this site? we dont give a fuck. that was the point i was attempting to make. i cant control the company, i can only control my store. and my store compted up something like 200% over last year, due in great part to the online. so, its working for me. it makes my customers happy, thats all i care about.

[hippieness]

Now I origionally said 97 as was on the netflix website and here on wikipedia http://en.wikipedia.org/wiki/NetFlix#Corporate_history it says 98. Now where in the hell did you get 2003???????

[Shuke]

hmmm...

how have any of these failed?


ROI




should be simple enough answer for them to understand

[sar94pga]

Netflix actually launched in 1999, not 1997. It was 2003 when John Antioco called online rentals a "niche market." Maybe if he hadn't thought that, BB Online wouldn't be getting crushed right now.

In 2004 when BB Online started, Netflix had less than 2 million customers.
In 2006 alone, Netflix added more customers than BB Online has in its existance.

And no, I don't care about your measly bonus. Congrats on getting your first bonus in 6 years.

first bonus in 6 years? i dont recall saying anything of the sort. I have bonused every year since being a Store Manager, My store bonus 3 out of the 4 eligible quarters last year, and i am low volume. so in my option, thats pretty good. what is your problem anyway?

[netflix_got_blockbusted]

Over two years ago you claimed you'd pass Netflix in terms of numbers of total subscribers in one year.

Lie # 1. Nobody at Blockbuster, including Shane Evangelist, ever made such a claim.

As others have pointed out, such a claim would make no sense given Netflix's 5 year head-start. For this reason, Blockbuster has consistently talked about marketshare in relation to Netflix, not total subscribers.



It was 2003 when John Antioco called online rentals a "niche market."

Lie # 2. Antioco never stated this. The year was 2005, and the person was Joe Malugen, Movie Gallery's CEO. Work on getting your facts straight.

http://media.seekingalpha.com/article/520



As it stands now, Netflix has about 6.3 Million subscribers to your 2 Million. I've got some bad news. Give up, you lost.

It's utterly stupid to focus on the cumulative marketshare, given Netflix's 5 year head start and established brand.

The relevant comparison should be marginal marketshare. In Q4, Blockbuster captured over 50% of new Online customers, thanks to Total Access and evidenced by Blockbuster's 700K+ gain in Q4 vs. Netflix's 650K gain.

Even better, Blockbuster's gain came despite very little external marketing in Q4. Blockbuster likely spent $40MM in Q4 to market its entire business, while Netflix spent $66MM in Q4 just to market Online.



ROI

ROI is clearly over your head. You're obviously a very sloppy person, as evidenced by your numerous factual errors. Perhaps you should focus on simpler things, like learning the difference between 2 million and 2.2 million.

[Shuke]

Lie # 2. Antioco never stated this. The year was 2005, and the person was Joe Malugen, Movie Gallery's CEO. Work on getting your facts straight.

http://media.seekingalpha.com/article/520




Well, I can see this is just a BBI circle jerk in here.
I'm not going to debate you on the lying not lying stuff. You disagree, that is up to you.

I do know that Antioco said the above quote. It was on CNBC during the Squawk Box show in 2003. I don't really care to look it up to prove it... oh what the hell, I'll try to find it anyway.

Good post though. You have some promise for an interesting conversation rather than the typical Store Manager splatter defense that is on here.

And yes, I do understand ROI. Do you think Game Rush has a positive ROI? Trust me, I know better.

[Shuke]

[QUOTE=netflix_got_blockbusted;210479]The relevant comparison should be marginal marketshare. In Q4, Blockbuster captured over 50% of new Online customers, thanks to Total Access and evidenced by Blockbuster's 700K+ gain in Q4 vs. Netflix's 650K gain.
QUOTE]

Blockbuster is not improving on its marginal market share. You can point to one quarter in the last three years where BB Online has seen an improvement, but in reality in 3 years its marginal market share hasn't improved at all. It is sitting in the same place it was three years ago, even with the "huge" Q4.

[Woodstock]

What does ROI stand for?

[sar94pga]

shuke may i introduce netflix got blockbusted...may you enjoy your bantering.

[Shuke]

Here's an article with Blockbuster spokesman Karen Raskopf calling Netflix mail-order business a niche market in 2002.

However, the company is playing with different pricing models and products in various cities, said Blockbuster spokeswoman Karen Raskopf. The company will decide whether or not it will introduce subscriptions nationally in the next two months.

"It differs from mail-order," Raskopf said. "We look at that and say, 'That's a niche market'--most people decide to rent the day of. This (service) gives you the ability to go to the store and get the product you want. So you have that immediate satisfaction, but you don't have to have the worry about extended movie fees."

"We think (this) is a good way to address one of the last rental barriers out there," Raskopf added.

http://news.com.com/2100-1023-949024.html

This clearly shows the Blockbuster mind-set as early as '02.
I know Antioco said it too.
Still searching for the exact quote.

[Shuke]

More from Raskopf in '03:

Blockbuster has also begun to investigate the online DVD rental market. Last year, it acquired Film Caddy, a small Netflix competitor. Blockbuster, however, considers online rental itself to be a niche market and is focused on a program it plans to start rolling out next year that would integrate online and in-store rentals. "The vast majority of people don't want to wait by the mailbox for their movies," Karen Raskopf, a spokeswoman for Blockbuster, said.

[johnlow71]

nobodyyyyyyyyyyyyyyyyyyyyy CARESSSSSSSSSSSSSSSSSSS.

[Shuke]

In his search for a new business for Blockbuster, Mr. Antioco has embraced some idea--like the mail-order DVD service--that he initially derided. When Netflix first started, Mr. Antioco argued its business was only a niche market because he didn't think consumers would want to think days ahead about what movies they want to order. But Netflix has signed up so many subscribers--three million as of last month, including many former Blockbuster customers--that he had no choice but to follow suit. Last summer he launched Blockbuster Online. So far it has grown quickly. Blockbuster initially expected it could sign up 250,000 customers by year-end. Instead within seven months, Blockbuster had signed up 750,000. Mr. Antioco's target is up to two million subscribers by early 2006.

http://www.apennyfor.com/movable_weblog/000895.html


getting closer....
Still think I'm lying?

[Shuke]

nobodyyyyyyyyyyyyyyyyyyyyy CARESSSSSSSSSSSSSSSSSSS.

I do.

Poster called me a liar for something I watched Antioco say on TV.

[johnlow71]

nobodyyyyyyyyyyy caresssssssssssss

[zooworker]

http://www.apennyfor.com/movable_weblog/000895.html


getting closer....
Still think I'm lying?
Glad someone is caling him down. And backing it up to. Don't worry about john he doesn't care about anything.

[rk237]

Dumb thread. :cool:

[johnlow71]

exactly rk, just beating a dead horse with this topic. we all know were all doomed so why try right:)

[Morbid Angel]

Now I origionally said 97 as was on the netflix website and here on wikipedia http://en.wikipedia.org/wiki/NetFlix#Corporate_history it says 98. Now where in the hell did you get 2003???????

Not trying to defend this guy or anything, but he quoted 2003 as being the year John Antioco said online rentals were a "niche market." I know Antioco did infact say that at one point, but I can't recall what year it was he said it.

[Morbid Angel]

hmmm...

First it was trading?? I think it went more like this:

Game Rush
Movie/Game passes
Trading
Online
End of Late Fees
Total Access

don't forget Rewards was #1

how have any of these failed?

I'd wager these ones are failures...

Movie/Game passes

End of Late Fees

[sar94pga]

I'd wager these ones are failures...

Movie/Game passes

End of Late Fees

i think that is a matter of opinion. the stores that did well with the pass programs didnt suffer. at the end of 2005 my store had 22% total pass penetration with 1700 actives and another 12-13% rewards. there were alot of mornings i would look at the auto charge report and i had already made tnr budget for the day, and i hadnt even opened the doors yet!

as far as EOLF's, my store was only open 6 months before we dropped late fee's, so i wasnt hurt at all.

as far as total access is concerned, all the stores in my district bonuses for Q4, and i am fairly certian that it was because of total access. what the real problem is the exchanges now. the TA customers arent spending money in our stores anymore. so instead of maylaying about the past, maybe we should be focusing on what to do to make money NOW....

[zooworker]

i think that is a matter of opinion. the stores that did well with the pass programs didnt suffer. at the end of 2005 my store had 22% total pass penetration with 1700 actives and another 12-13% rewards. there were alot of mornings i would look at the auto charge report and i had already made tnr budget for the day, and i hadnt even opened the doors yet!

as far as EOLF's, my store was only open 6 months before we dropped late fee's, so i wasnt hurt at all.

as far as total access is concerned, all the stores in my district bonuses for Q4, and i am fairly certian that it was because of total access. what the real problem is the exchanges now. the TA customers arent spending money in our stores anymore. so instead of maylaying about the past, maybe we should be focusing on what to do to make money NOW....
TA exchange fees!:rolleyes:

[videoslave23]

as far as total access is concerned, all the stores in my district bonuses for Q4, and i am fairly certian that it was because of total access. what the real problem is the exchanges now. the TA customers arent spending money in our stores anymore. so instead of maylaying about the past, maybe we should be focusing on what to do to make money NOW....

AMEN.

I've bonused the last 4 quarters in a row thanks to BBO. Obviously they are gaining some market share. The netflix vs. blockbuster question puts me to sleep. All I care about is the next 4 bonuses. (Or lack thereof)

[Morbid Angel]

i think that is a matter of opinion. the stores that did well with the pass programs didnt suffer. at the end of 2005 my store had 22% total pass penetration with 1700 actives and another 12-13% rewards. there were alot of mornings i would look at the auto charge report and i had already made tnr budget for the day, and i hadnt even opened the doors yet!

I'm looking at it from a corporate, company wide perspective. One thing to always keep in mind when discussing the MP is that it was introduced for one purpose and that was to kick Netflix's ass. In that sense, it was a complete and utter failure. I've said it before and I'll say it again, the only thing the "I Have No Life Pass" was ever succesful in doing was converting $90 a month customers into $30 a month customers. The program needs to be terminated immediately.

as far as EOLF's, my store was only open 6 months before we dropped late fee's, so i wasnt hurt at all.

Even Netflix_got_Busted admits EOLF was a mistake. Need I say more? :D

[DraconianSM]

2.2 million versus 2 million? Sorry I was way off in my facts. I wasn't pedantic. You were so precise with your NetFlix figure, yet when you wrote about Blockbuster you rounded down 200,000 subscribers.

Perhaps you should focus on simpler things, like learning the difference between 2 million and 2.2 million.

:D Thank you, n_g_b.



And yes, I do understand ROI. Do you think Game Rush has a positive ROI? Trust me, I know better.

The Gamerush districts in my region take it to the bank. I'll give you the first year was a mess with the outrageous trade deals and all the 'scammers' taking advantage of them. Now, I guarantee you the stores losing money and getting closed are NOT the Gamerush ones.

[Shuke]

I wasn't pedantic. You were so precise with your NetFlix figure, yet when you wrote about Blockbuster you rounded down 200,000 subscribers.


I was precise because I pulled the 2 Million number out of the Dallas Morning News article, didn't round down at all.

After doing some research yesterday, it appears at year end 2006 Blockbuster Online has 2 Million paying subscribers to Netflix 6.3 Million paying subscribers.

If you include all subscribers (paying and non-paying) the totals are 2.2 Million to 6.8 Million.

Is that precise enough?

[Shuke]

"This is clearly a marathon," says Shane Evangelist, general manager for Blockbuster online. "But once we're integrated, you won't be able to touch us on service." Evangelist predicts that the company will have 6.6 million online subscribers by 2008, whereas Netflix forecasts 5 million by 2006.

:D

http://www.usnews.com/usnews/biztech/articles/041018/18dvd.htm

[CapitalRadioTwo]

End of Late Fees was a horrible idea, and now the Movie Pass looks like one in light of total access.

[rk237]

End of Late Fees was a horrible idea, and now the Movie Pass looks like one in light of total access.

I personally don't think they were meant to do much else other than just belay a mass exodus over to the emerging pay-per-view and online renting sensations until Blockbuster could properly set itself up in those areas and then move its own customers, who hadn't crossed over sooner on account of the end of late fees, movie pass, etc.

[DraconianSM]

If you include all subscribers (paying and non-paying) the totals are 2.2 Million to 6.8 Million.


:confused: Now specifically where are you getting that NetFlix has 6.8 million?



*Here are some facts with specific sources that show a positive outlook for Blockbuster:
--------------------------------------------------------------------------
Date Netflix, Marry Amazon, Kill Blockbuster
By Rick Aristotle Munarriz
February 14, 2007

As a Netflix investor, you would expect me to choose the pioneer as my fiancee, but I'm concerned about the company's long-term prospects. It's only looking to add between 1.7 million to 2.1 million new subscribers this year, a decline from its additions last year.

I've been kicking the tires of Blockbuster's Total Access service for two months now. It's a worthy competitor to Netflix. The company has just 2.2 million subscribers at the moment, but expects to add 1.8 million more net members by the end of the year. In other words, Blockbuster will start off the year with a third of the Netflix base, but wrap things up with nearly half of the Netflix population.
---------------------------------------------------------------------
Jim Cramer's Mad Money Lightning Round Picks, Feb. 15
Friday February 16, 4:29 am ET
Bullish calls:

Blockbuster (NYSE: BBI - News): 'No, you don't have to sell it. That WMT is all bluster now [WMT's video rental service] I am not worried one bit about WMT. I am reiterating my buy for BBI.'
----------------------------------------------------------------------
Harvard buys stake in Blockbuster video rental company
Monday February 12, 1:06 pm ET


Harvard University has bought an 8 percent stake in Blockbuster Inc., according to the Harvard Crimson.
The student newspaper reported that in the final quarter of 2006, Harvard bought 5.8 million shares of the Dallas-based video rental company (NYSE: BBI - News).

[netflix_got_blockbusted]

Jim Cramer....I am reiterating my buy for BBI...Harvard buys stake in Blockbuster video rental company

Thanks for posting. Blockbuster made additional progress today, by divesting its Australian subsidiary.

http://biz.yahoo.com/prnews/070222/nyth055.html?.v=77


Blockbuster's tide has shifted, and it's amazing to me that people who should be expert on the video industry (Ozman, Orbit) apparently missed the shift.


Blockbuster has certainly made mistakes in the past. But dwelling on the past is a job for historians.


Employees, analysts, and investors would be better served to analyze Blockbuster's future. And as I laid out here

http://www.ihateblockbuster.com/forum/showpost.php?p=204870&postcount=403

and here

http://www.ihateblockbuster.com/forum/showpost.php?p=205015&postcount=413

today's Blockbuster will benefit from at least 3 major trends:


(1) Non-core asset divestitures, which will help Blockbuster to raise cash and pay down debt. Taiwan divested. Australia divested. Spain divested. Peru divested. Rhino divested. All within the past few months.

(2) Strategic closures of overlapping stores. In today's environment, there's no need to have 2 or more Blockbuster stores located within a few blocks of each other. Strategic closures = More Profit.

(3) Total Access, which will not only even the race Online but will also help to speed the demise of Hollywood Video. Movie Gallery / Hollywood Video closed 88 stores on a net basis during Q3. This is the beginning of a very important trend that will benefit Blockbuster over the next few years.

Online growth and its effects are crucial to understanding Blockbuster's turnaround, yet many people aren't connecting the dots.

While on first blush Online growth seems like a negative for Blockbuster, the irony is that Online growth could result in Blockbuster becoming stronger than ever, as continued Online growth could result in Blockbuster becoming an in-store monopoly.

While total in-store demand will shrink, Blockbuster's share of the pie will increase substantially as nearby in-store competitors (like Hollywood Video) will have to exit competitive markets.



It's a new day for Blockbuster. Carl Icahn sees it. Jim Cramer sees it. Harvard sees it. And the overall market sees it, as Blockbuster is up nearly 100% since the launch of Total Access.

In the end, it's really easy to Monday Morning Quarterback Blockbuster's past mistakes. But isn't it more fun to predict the future....and to be right?

[Shuke]

In the end, it's really easy to Monday Morning Quarterback Blockbuster's past mistakes. But isn't it more fun to predict the future....and to be right?

Interesting post. I really don't know how easy it is to Mondy Morning Quarterback Blockbuster's past. It seems to me like there is not enough accountability for what the executives say they are going to do against what they deliver. I don't really consider that being a historian or a Monday Morning Quarterback. I'd rather use it as a way of holding people accountable for what they say and what they do.

And if you want to predict the future of Blockbuster, wouldn't you want to consider some of the past decision making and the trend in successes that they've had?

The failures at Blockbuster continue year in and year out. They have tried selling the "great new thing" every year to the consumer only to see it shrivel up like banana peel on a sidewalk in Honduras. What is their last major success? I can't think of any in the last 8 years. Please point me to one major victory outside of one quarter of Total Access?

My question really boils down to this:
Instead of pissing away hundreds of millions of dollars each year rolling out new initiatives that won't work, that the kids in the stores don't even understand, and marketing efforts that are merely a band-aid, why not invest in some customer service initiatives?
Why not put some money into training your employees?
Why not invest in higher quality managers?

The store experience is really so bad, that none of the crappy initiatives that they have rolled out in the last 8 years actually makes people want to go back to the stores.

People (not me) went to Blockbuster because they had no other alternative (until Netflix). Now, you see what happens when you give people an alternative to going into a Blockbuster store?

I could go on for days on this stuff.... but will stop for now.

[DavidNewlySL]

Interesting post. I really don't know how easy it is to Mondy Morning Quarterback Blockbuster's past. It seems to me like there is not enough accountability for what the executives say they are going to do against what they deliver. I don't really consider that being a historian or a Monday Morning Quarterback. I'd rather use it as a way of holding people accountable for what they say and what they do.

And if you want to predict the future of Blockbuster, wouldn't you want to consider some of the past decision making and the trend in successes that they've had?

The failures at Blockbuster continue year in and year out. They have tried selling the "great new thing" every year to the consumer only to see it shrivel up like banana peel on a sidewalk in Honduras. What is their last major success? I can't think of any in the last 8 years. Please point me to one major victory outside of one quarter of Total Access?

My question really boils down to this:
Instead of pissing away hundreds of millions of dollars each year rolling out new initiatives that won't work, that the kids in the stores don't even understand, and marketing efforts that are merely a band-aid, why not invest in some customer service initiatives?
Why not put some money into training your employees?
Why not invest in higher quality managers?

The store experience is really so bad, that none of the crappy initiatives that they have rolled out in the last 8 years actually makes people want to go back to the stores.

People (not me) went to Blockbuster because they had no other alternative (until Netflix). Now, you see what happens when you give people an alternative to going into a Blockbuster store?

I could go on for days on this stuff.... but will stop for now.

Where shall I begin..Let me start with the business structure of it all. Blockbuster has made some very good decisions in the past..but with new things coming along of course they are not going to last for very long. The movie pass, well at my store, sold very well, rewards, sold very well, to which 75%, and this is an accurate number, 75% of my customers were on a program, which is the main reason why for 4 years running we had the highest penetration in the region. In my new store, I think that business is picking up in the store as well as out. Look at it..I am getting 35-40 activations every single well, and 45-65 rewards. Last week alone I sold 60 rewards, and 47 of those were new. Out of my new customers I had 112% activations on the new rewards members. My TNR and BPM put together at 125%, which means I bonus 1 dollar and 25 cents. My retail, is at 144% of TNR, and my rentals are at 99.5% TNR. My percent with spend is up to 36.7%, and my average per visit is 7 dollars and 51 cents.

LAst week my store made 22,209 dollars, not including the exchanges with spend. Netflix just might be defeating us right now with their 6.3 million subscribers, but if you total in store spends, and online, I do believe we are kicking their ass.

[zooworker]

LAst week my store made 22,209 dollars, not including the exchanges with spend. Netflix just might be defeating us right now with their 6.3 million subscribers, but if you total in store spends, and online, I do believe we are kicking their ass.
You have a busy store, mine takes 3 weeks to do that. But we are very profitable. Small location with lots of members on programs. We have a very loyal base of customers. They love to spend cash. PRP, sells like crazy here for a store our size , i get in an average of 150 to 200 a week from others stores(note: Can't you people put correct prices on them , no wonder you can't sell them), although they are closing several large stores in the area.

[NetflixInvestor]

Blockbuster is the gorilla in movie renting, and the BBOTA program is enormously more attractive than Netflix for those customers accustomed to renting in a Blockbuster store. That Blockbuster is shedding its international assets, bulking up its finances, and pouring it all into its online business is troubling for NFLX and the market has responded.

Nevertheless, it's my opinion that BBOTA can not live in perpetuity at its current configuration. If you consider Netflix profitability, if costs rose a single dollar per month per customer they would be unprofitable. And Netflix management has always been laser focused on cost control, such that Blockbuster is very unlikely to match their cost parameters. This is to imply that there is not a lot of fat in the model at these prices. Can Blockbuster offer the more expensive game rental, the ability to literally have 6 movies at your house at one time, and not eclipse a single dollar uptick in cost?

Now that analysis questions whether the BBOTA program taken by itself is profitable. The more troubling consideration is the impact of drawing in-store customers (which are guaranteed to be profitable) into the program. It would be acceptable to create a breakeven business, unacceptable to destroy the profitability of your existing one to do it.

Blockbuster came on hard with the movie pass program, which grew faster than they anticipated, after which they raised prices, and the program faded. When they came on hard with their initial online launch, and undercut Netflix to 15$, it was also not a durable price point. Blockbuster management tends to be late to the game, and has a bit of a manic-depressive nature to their decision making. Netflix management makes bold and possibly naive forecasts of the future, but is forthcoming and honest about details of their business model and current metrics. Blockbuster management on the other hand is highly selective of publishing only what is favorable. Simply put, I think Antioco is an empty suit skilled at fleecing the shareholders of huge paychecks.

I think biasing yourself to believe that Blockbuster has found a durable winner here, mostly on faith in management, would be naive. I expect a price increase or massive curtailing in advertising before the end of Q2.

[zooworker]

Another doom and gloom poster. So why is your stock going down And BBO up?

[AmazonBitch]

See attached image.

[zooworker]

That's rich Amazon, IM what link you got that from.

[rk237]

*Sprays raid around the IHBB baseboards*

Sheesh where do they keep coming from?

[NetflixInvestor]

Another doom and gloom poster. So why is your stock going down And BBO up?

My post was not doom and gloom. I said nothing about a Blockbuster implosion or massive shut down of stores or death of the video store. I called for a small price increase of a program that constitutes a fraction of their business.

When you say 'going up' and 'going down' you are using meaningless words because you haven't defined a timeframe. As of what? Today? last 6 months Last 3 years?

If I can be so bold as to clarify your question and specify why they have gone in opposite directions in the past 3 months, I can only say that the market perceives a change in the future value of the companies. The market is smarter than most people but is composed itself of people and fallible. If Blockbuster was worth 7$ a share today, why was the market ignorantly pricing it so much lower 6 months ago? Answer: it only has so much predictive accuracy.

So far Blockbuster has given us the good news. They haven't given us ALL the news. I've read enough of this forum to see more gloom and doom from Blockbuster's own employees than I just posted.

Have you any reasonable logic to add?

[AmazonBitch]

My post was not doom and gloom. I said nothing about a Blockbuster implosion or massive shut down of stores or death of the video store. I called for a small price increase of a program that constitutes a fraction of their business.

When you say 'going up' and 'going down' you are using meaningless words because you haven't defined a timeframe. As of what? Today? last 6 months Last 3 years?

If I can be so bold as to clarify your question and specify why they have gone in opposite directions in the past 3 months, I can only say that the market perceives a change in the future value of the companies. The market is smarter than most people but is composed itself of people and fallible. If Blockbuster was worth 7$ a share today, why was the market ignorantly pricing it so much lower 6 months ago? Answer: it only has so much predictive accuracy.

So far Blockbuster has given us the good news. They haven't given us ALL the news. I've read enough of this forum to see more gloom and doom from Blockbuster's own employees than I just posted.

Have you any reasonable logic to add?

See attached image.

[Angry]

AMEN.

I've bonused the last 4 quarters in a row thanks to BBO. Obviously they are gaining some market share. The netflix vs. blockbuster question puts me to sleep. All I care about is the next 4 bonuses. (Or lack thereof)

Man, I wish my store had a bonus program. :mad:

[sar94pga]

Man, I wish my store had a bonus program. :mad:

i dunno though, there are days i would love to be franchise too. 6 of one, half dozen of the other i guess.

[DraconianSM]

Why not put some money into training your employees?



I'm sure Blockbuster paid a lot to get Compass rolled out to its stores. They developed interactive modules to train everyone from CSR to District Manager.

As far as hiring better quality managers, I partially agree. The real problem is retaining the good ones.

[videoslave23]

I'm sure Blockbuster paid a lot to get Compass rolled out to its stores. They developed interactive modules to train everyone from CSR to District Manager.

As far as hiring better quality managers, I partially agree. The real problem is retaining the good ones.

Yeah, Blockbuster dished out some money to develop the modules. It would be nice if they gave us labor so that the employees could actually take said courses, though. Even management trainees are expected to train in their home store to get all their modules done on the store's regular payroll. If they get a week in the training store to get "certified", they are lucky. (At least where I am from)

As far as retaining the good ones, you're right on the money there. Every day the company gives more and more reasons to leave, and less reasons to stay. They consistently raise expectations, and then when it comes time for merit increases they reward star employees with 10 cent raises.

[OzMan]

As far as retaining the good ones, you're right on the money there.

The problem is, when you get short-sighted (and BBI has been short-sighted for a long time now..... and anyone that thinks that TA is anything other than a short-sighted attempt to stave off bankruptcy is just deluding themselves), you think that if you can save $5-10k by "getting rid of" a great manager, and replacing them with a barely functional manager, it's a smart business move. Training is cheaper than raises when you don't provide the necessary training (if any)

[NetflixInvestor]

anyone that thinks that TA is anything other than a short-sighted attempt to stave off bankruptcy is just deluding themselves

How does one describe TA as short-sighted? In the short run it is an enormous expense - something that would only pay off possibly in the long run. If one wanted to get conspiratorial, you could claim that it's a program intended to hype the stock up with only half the story (growth but at undescribed cost).

For what reason do you call it short-sighted?

[netflix_got_blockbusted]

anyone that thinks that TA is anything other than a short-sighted attempt to stave off bankruptcy is just deluding themselves

More stupid comments from Ozman, who clearly has more time than brains.

You keep talking about bankruptcy. Do you have any clue as to what causes bankruptcy? Corporations and bankruptcy are like homeowners and default.


A homeowner's probability of default is driven by
(1) Income and
(2) Debt level (mortgage payment by implication)

Increasing income is a good thing, and reducing your loan amount (and by implication your monthly payment) is also a good thing.



Similarly, a corporation's probability of bankruptcy is driven by
(1) EBITDA (the equivalent of income) and
(2) Debt level (loan payment by implication)



If you bothered to actually read BBI's financials, you'd realize that EBITDA is increasing (a good thing) and Debt is decreasing (also a good thing).


Debt is down from almost 1.3 billion on Oct 1 2005 to under 1 billion on Oct 1 2006.

Meanwhile, BBI generated close to $300MM EBITDA over the past 4 quarters, which is an improvement over the prior year's EBITDA.


In general, bankers want a company to generate EBITDA of 2 x Interest Expense. In BBI's case, its EBITDA was 2.75 times its Interest Expense over the past 4 quarters. Meanwhile, its debt continues to be paid down and its EBITDA continues to increase.


Your bankruptcy argument might have gotten some traction a year or two ago, but anyone who thinks that today's Blockbuster is anywhere near bankruptcy is a complete buffoon.

[OzMan]

(growth but at undescribed cost).

For what reason do you call it short-sighted?

I think you just answered your own question.

If you want to look deeper, they are having a fire sale of assets (foreign operations, DEJ, etc) to make their books look healthy enough so that no one realises that they are using store revenue to Enronise the Online side of the business to fool the investors. And look at how well that works:


Debt is down from almost 1.3 billion on Oct 1 2005 to under 1 billion on Oct 1 2006.


My god, are you truly that fucking dense?

It's STILL a fucking BILLION dollars. That's Billion, with a B.

Like some other MBA arsehole said, about government finance "A billion here, a billion there, pretty soon you are talking about real money"

(NB, I don't think the guy that originally said that [whose name escapes me] really had an MBA. He was much too intelligent for that)

[NetflixInvestor]

If you want to look deeper, they are having a fire sale of assets (foreign operations, DEJ, etc) to make their books look healthy enough so that no one realises that they are using store revenue to Enronise the Online side of the business to fool the investors.

It's of course humorous to note that BBI had a deal with Enron for bandwidth on a VOD initiative back in 2001. We shall see how Blockbuster is faring this week. I recommend paying close attention to what they don't say.

[orbitdvd]

They will have the Rhino and Australian sales to pump up the bottom line a little for Q1 07.


marc

[netflix_got_blockbusted]

It's STILL a fucking BILLION dollars. That's Billion, with a B.

Stupid answer from a stupid person.

Using your "logic", every company with a Billion (with a "B") dollars in debt is destined for bankruptcy.

You can't simply look at one side of the equation. You have to compare (A) Debt Level with (B) Income/EBITDA

In BBI's case, it generates $300MM of EBITDA annually (2.75 x Int Expense), more than enough to service its debt.

Again, a bankruptcy argument would have had more credibility a year or two ago. Today's Blockbuster has 25% less debt and generates more income (as measured by EBITDA, which doesn't include asset sales) than it did 1 year ago.

[rk237]

More stupid comments from Ozman, who clearly has more time than brains.


This coming from the guy who's sat here and quoted every chapter of my old econ text by now.

Stupid answer from a stupid person.

Using your "logic", every company with a Billion (with a "B") dollars in debt is destined for bankruptcy.


Because we all know existential quantification implies universal. :rolleyes:
Thanks for the lesson in logic.

[zooworker]

B as in billion is a fucking lot of money for a company that is spending it right and left.
Oh, NGB you are not on the front line seeing the constant waste of money going on. All you see is whats on paper. Many of us have worked for years here, and BBI is now using scare, and hassle tactics on it's employees. Will that make money. No Just reduce morale and worst customer service. Seen it happen before in my last job and it doesn't work. That company is now in dire needs and soon will go under due to the same tactics. Get off the high horse about how well we are doing and look into how the employees are doing. As a whole most are very upset about how they are being treated, and that can bring the downfall. Sure fire us all and hire idiots that don't give a shit and try to make money.
Thanks OZ

[yousickf'ingbastard]

I still care a fuckless about all of this :(

[Shuke]

never mind

[Shuke]

Thanks for posting. Blockbuster made additional progress today, by divesting its Australian subsidiary.

http://biz.yahoo.com/prnews/070222/nyth055.html?.v=77


Blockbuster's tide has shifted, and it's amazing to me that people who should be expert on the video industry (Ozman, Orbit) apparently missed the shift.


Blockbuster has certainly made mistakes in the past. But dwelling on the past is a job for historians.


Employees, analysts, and investors would be better served to analyze Blockbuster's future. And as I laid out here

http://www.ihateblockbuster.com/forum/showpost.php?p=204870&postcount=403

and here

http://www.ihateblockbuster.com/forum/showpost.php?p=205015&postcount=413

today's Blockbuster will benefit from at least 3 major trends:


(1) Non-core asset divestitures, which will help Blockbuster to raise cash and pay down debt. Taiwan divested. Australia divested. Spain divested. Peru divested. Rhino divested. All within the past few months.

(2) Strategic closures of overlapping stores. In today's environment, there's no need to have 2 or more Blockbuster stores located within a few blocks of each other. Strategic closures = More Profit.

(3) Total Access, which will not only even the race Online but will also help to speed the demise of Hollywood Video. Movie Gallery / Hollywood Video closed 88 stores on a net basis during Q3. This is the beginning of a very important trend that will benefit Blockbuster over the next few years.

Online growth and its effects are crucial to understanding Blockbuster's turnaround, yet many people aren't connecting the dots.

While on first blush Online growth seems like a negative for Blockbuster, the irony is that Online growth could result in Blockbuster becoming stronger than ever, as continued Online growth could result in Blockbuster becoming an in-store monopoly.

While total in-store demand will shrink, Blockbuster's share of the pie will increase substantially as nearby in-store competitors (like Hollywood Video) will have to exit competitive markets.



It's a new day for Blockbuster. Carl Icahn sees it. Jim Cramer sees it. Harvard sees it. And the overall market sees it, as Blockbuster is up nearly 100% since the launch of Total Access.

In the end, it's really easy to Monday Morning Quarterback Blockbuster's past mistakes. But isn't it more fun to predict the future....and to be right?


Still hovering around $4 a share. Actually down about 20% from the time of your post. Keep up the great work!!:D

[Shuke]

Interesting post. I really don't know how easy it is to Mondy Morning Quarterback Blockbuster's past. It seems to me like there is not enough accountability for what the executives say they are going to do against what they deliver. I don't really consider that being a historian or a Monday Morning Quarterback. I'd rather use it as a way of holding people accountable for what they say and what they do.

And if you want to predict the future of Blockbuster, wouldn't you want to consider some of the past decision making and the trend in successes that they've had?

The failures at Blockbuster continue year in and year out. They have tried selling the "great new thing" every year to the consumer only to see it shrivel up like banana peel on a sidewalk in Honduras. What is their last major success? I can't think of any in the last 8 years. Please point me to one major victory outside of one quarter of Total Access?

My question really boils down to this:
Instead of pissing away hundreds of millions of dollars each year rolling out new initiatives that won't work, that the kids in the stores don't even understand, and marketing efforts that are merely a band-aid, why not invest in some customer service initiatives?
Why not put some money into training your employees?
Why not invest in higher quality managers?

The store experience is really so bad, that none of the crappy initiatives that they have rolled out in the last 8 years actually makes people want to go back to the stores.

People (not me) went to Blockbuster because they had no other alternative (until Netflix). Now, you see what happens when you give people an alternative to going into a Blockbuster store?

I could go on for days on this stuff.... but will stop for now.

bumping up

[zooworker]

Still hovering around $4 a share. Actually down about 20% from the time of your post. Keep up the great work!!:D
They are crawling out of the woodworks again, This thread died 5 months ago.