How do you save a struggling franchise that's having its lunch eaten by its competitor? If you're Blockbuster CEO Jim Keyes, you take the fight public and talk about the shortcomings of your main competitor, in this case Netflix which has seen its stock soar and customer base grow in a hockey stick up, while Blockbuster's has gone the other way. It's in the process of closing 1,000 stores and is watching companies like RedBox getting bigger in its rear-view mirror.
In a Los Angeles Times interview this week Keyes, who has pulled out all the plugs in an effort to stop his leaky ship from foundering-he's been at the helm since 2007 and struggled to keep the Dallas-based company afloat after losing $558.2 million last year on revenues that shrank $1 billion, pushing the share price down to 30 cents-offered a backhanded compliment to Netflix's "wonderful" streaming video service that was good, he said, only for "older titles and television."
Keyes said Blockbuster's customers-as many as 60 percent to 80 percent of them-want to watch new releases and are wiling to pay to stream them on Blockbuster-on-Demand as opposed to Netfix's free catalog of older content.
"Do you want to watch "The Blind Side" or "Herbie Goes to Cancun"? Netflix has a wonderful Internet service for older titles and television," he said. "Our customer demand is 60% to 80% for new releases. The subscription model does not translate effectively to what our customers want to see when they want to see them."
Netflix reports Q1 results April 21 and is expected to beat anlysts' projections on subscriber growth--due primarily to its rollout of streaming for the Nintendo Wii gaming platform--and earnings. The company's emerging hybrid distribution model (mail and streaming) are considered to be the industry's most aggressive and most advanced.
Where Blockbuster once ruled the industry with a store on seemingly every street corner, Netflix now is the unchallenged leader as far as size and scope, in the industry, giving its subscribers access to a library of more than 18,000 movie and television titles.
For more:
- see the Times interview
Related articles:
Blockbuster "going concern risk," Netflix waits in wings
Blockbuster to stream online videos to PC with CinemaNow