I Hate Blockbuster Forum  

Go Back   I Hate Blockbuster Forum > I Hate Blockbuster > News

Thread Tools Display Modes
Unread August 14th, 2008, 10:40 AM
JustTheFacts JustTheFacts is offline
Senior Member
Join Date: May 2005
Posts: 379
Looking more and more like a lottery ticket

Bad News for Netflix and Blockbuster
By Rick Aristotle Munarriz
August 14, 2008 Comment (0) Recommend (0)
Today is not a good day to loan out DVDs.

A service outage at Netflix (Nasdaq: NFLX) and a credit downgrade at Blockbuster (NYSE: BBI) are making this a doozy of a day for an industry that should be raking it in during this staycation summer.

The Netflix downtime isn't as potentially detrimental as the worrisome downgrade at Blockbuster. A tech snafu has limited Netflix's ability to ship out DVD rentals through its distribution centers since Tuesday, even though the story is only coming to light today.

Netflix has had outages before. Its website was down for a significant spell back in March. The company bounced back. It always does.

"Will subscribers bolt in droves?" I rhetorically asked after March's outage.

"Of course not," I answered. "History is actually kind to the purveyors of downtime. There were pronounced outages in the 1990s for Time Warner's (NYSE: TWX) AOL and for eBay (Nasdaq: EBAY). They clearly rose above it. Last year's prolific killjoys included Research In Motion's (Nasdaq: RIMM) BlackBerry in April, Sirius XM Radio's (Nasdaq: SIRI) XM in May, and yes, even Netflix, in July. All of these companies are watching over larger user bases today."

If you need any proof that Netflix will get over this week's distributory slip, just consider that Netflix had just 7.5 million subscribers at the beginning of the year, and was up to 8.4 million movie buffs by the end of June. Folks keep coming. The outages are unfortunate, but they sometimes validate the model, once subscribers realize how badly they miss the service.

Blockbuster's burden won't be so easy to fix. Credit rating agency Moody's is cutting the company's probability of default rating. Even though Blockbuster's backing away from plunging into a risky acquisition of Circuit City (NYSE: CC), it still faces model viability and refinancing challenges.

Then again, investors know that there are risks aplenty in Blockbuster. When the share price is lower then the going rate on a movie rental, it starts looking more and more like a lottery ticket.

Let's hope that "fade to black" is a better description for the conclusions of the films Netflix and Blockbuster rent than the fortunes of the companies themselves.
Unread August 15th, 2008, 07:37 PM
sar94pga's Avatar
sar94pga sar94pga is offline
Join Date: Dec 2005
Location: in a house. with a pool.
Posts: 10,046
my favorite part of the day was reading about now netflix had a HUGE computer glitch and werent able to mail out discs yesterday.
With you guys until the very end. Thank you for all the years of good times and great friends!
The Following User Says Thank You to sar94pga For This Useful Post:
johnlow71 (August 16th, 2008)
Unread August 17th, 2008, 11:34 AM
The Omen's Avatar
The Omen The Omen is offline
Join Date: Mar 2008
Location: Riding the rails!
Posts: 2,541
i like lottery tickets specially the ones you scratch and try to win! Then when you think you lost, you get to scratch another box, then you find out you really did lose.

I think i will keep my money next time
A true outlaw finds the balance between the passion in his heart and the reason in his mind. The outcome is the balance of might and right.
Unread August 18th, 2008, 08:14 AM
zooworker's Avatar
zooworker zooworker is offline
Join Date: Sep 2005
Location: Over there
Posts: 24,638
Can you use BBI stock as coupons for rentals?
It's been a Fun Ride,
THANKS!! Old Friends!!
The top Poster!


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

All times are GMT -8. The time now is 03:06 AM.

vBulletin Version 3.7.1
© 2020, Jelsoft Enterprises Ltd.