If you look at the dvdgame rental secotr, there are three players; netflix, redbox, and blockbuster. In the past few years, nflx has been destroying blockbuster because people just decided that they weren't in the mood to drive/walk to their nearest blockbuster when they can just click a button and have the movie delivered to their doorstep. This is the way America is now thinking. What can I do that will allow me to move the least amount? That is why we are the most obese country in the world but that is a topic for another day lol. Blockbuster was caught off guard by netflix and acted like a dinousar. Thats why this company was once worth a low pirce of 13 cents! Bu look now, the company is now $1.40. Why, one would ask? The reason is simple, Blockbuster is adapting. They have cleared up a lot of debt, making for more liquidity and allowing them to pursue other avenues of DVD rental. Another thing is that blockbuster is taking on netflix head on with their own mail dvd program and will eventually do online streaming as well. That will take profits away from netflix. Blockbuster is taking on redbox head on by putting out 10,000 dvd rental kiosks by the end of this year. Boom, redbox obsolete. Blockbuster will have stores, kiosks, and online dvd rentals putting them in all three main areas of dvd rental whereas redbox only has kiosks, and netflix only has the online side. Blockbusters market cap. is less than one tenth of netflix as of today, but how can a company that will be in all three main areas of dvd rental and taking profits away from its main competitors remain at such a low market cap? it can't simple as that. This company is going in the right directions and is becoming very agressive. Thats a major strength. One would be very naive to believe that blockbuster is closing stores to conserve money for nothing. I'm sure they have a very strategic way of taking netflix head on by offering a better deal for online dvd rental and streaming in the future thereby taking a lot of customers from its competitor netflix.
pundit, you are completely wrong. Yes, they were first in the market, but blockbuster can compete with them and take away business from them. you're missing the key idea that this is america and people enjoy having alternative choices. Blockbuster will give them that.
1) NETFLIX does the mail order business far better with greater title selection and far speedier service, and it shows with more than 80% market share to NETFLIX on the mail order side. 2) REDBOX does the physical presence job better with zero overhead on their rapidly multiplying kiosks. No salary required to staff a kiosk, no huge retail store overhead. 3) Name any other media company and you will find they all do a better job of delivering digital content than Blockbuster. 4) Let's not forget the enterprise value of having an occasional hottie working the rental counter - hence the generous 5 cent valuation.
I understand why you believe Netflix has the advantage and that yes, blockbuster i s late to the game. But they are reacting and they are becoming very agressive. They are taking Netflix headon in online rental and streaming and they are taking redbox head on in kiosks. Netflix does have 80% market share in online rental but that will change as time goes along and blockbuster advertises a lot more and people become aware that blockbuster has online as well. Second, regarding kiosks, yea, redbox got there first, but it's not too late. There's plenty of places to put a kiosk and blockbuster has the added advantage of having a brand name. Yo u may not agree with that, but it is a big advantage.