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Blockbuster CEO talks about upcoming plans for brick and mortar operations

Blockbuster CEO James Keyes is hoping to bring profit back to the company he took over earlier this year by returning to a strategy focusing on their brick and mortar stores.

While this isn't exactly a reveletion given the heavy losses incurred while trying to compete with online DVD rental leader Netflix, Keyes isn't really trying to move the company in a different direction so much as to a different path that leads to the same place.



"This is an industry in transition and a company that hasn't been able to keep up with that change," said Keyes, named CEO in July. "But Blockbuster is one of the best-known brands in the world. We've just got to find ways to use technology to make the company more relevant."

One of the most important technologies Keyes sees in Blockbuster's future is the kiosk. Recently, with the success of DVD rental kiosks at McDonalds restaraunts and recent changes to DVD copy protection standards that allow burning encrypted DVDs, kiosks are generally expected to see heavy growth in the next few years. A company like Blockbuster could conceivably leverage branded kiosks to bring their products into a wide variety of retail spaces that have traditionally either avoided DVD rentals or had Limited operations.

Keyes seems to be aware of the technology's potential. He mentioned on-demand burning and direct transfers to mobile devices as two possible directions the company could be going soon.

Source: Associated Press

Written by: Rich Fiscus @ 17 Nov 2007 18:34

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• 10 comments

• ali2007

  ,this is bad future if you are considering kiosk,because it would be people to be jobless , but profits for you who cares,you s*ck b*st*rd

  18.11.2007 06:56 #1

• ker7099

  People are losing their jobs anyways since the rental industry is collapsing as far as brick and mortar stores go. Trust me I have been working in the video rental business for almost 6 years now and just watched the store I originally started at and two others close just last month and their are more closings on the way. And now Movie Gallery is bankrupt, which includes the Hollywood Video brand. So now the these guys need to find a new way to compete with the source of the problem. DVD rental kiosks and online rentals are the biggest threat to brick and mortar stores. And both companies are looking into both or already have a stake in those areas to help them compete and try and keep their companies alive so they can continue to make a profit and therefore provide jobs to people. So are you saying that Blockbuster and Movie Gallery shouldn't try and protect their interest, which is to keep the companys alive? Therefore causing a complete loss of jobs for almost all of their employees? Do you even have any idea what you are talking about?
  
  [url=http://www.afterdawn.com/news/archive/11868.cfm][/url]

  18.11.2007 09:15 #2

• c1c

  Im glad to see Blockbuster on a decline. These jerks made 70% of their profits from overdue fees a few years back.
  
  So far I love my Netflix, reasonable prices, huge selection.

  18.11.2007 10:43 #3

• hammer20

  How does the use of a Kiosk eliminate jobs? I see it as doing the exact opposite. For starters the kiosks are being manufactured, therefore creating jobs, the technology used to create the kiosk was developed by someone (therefore engineers and software developers were needed) and so on.....It's unfortunate jobs had to be lost but, I have a friend who is employed part time at BB and he is paid slightly above minimum wage. So what really is lost?

  18.11.2007 12:45 #4

• aro75

  I feel if Blocbuster has lasted this long with rivals like Netflix their continued efforts to out do their competition will pay off. I would rather go tho the Video Store with my family to pick out a movie than receive one through the mail.
  
  I would also like to reply to c1c's comment. Although you are correct on how Blockbuster receive most of their profits it doesn't make them any different on how most Banks make their money e.g. Overdraft charges!!!

  19.11.2007 10:18 #5

• SProdigy

  Movie Gallery went bankrupt because they purchased Hollywood, which was FAR in the hole. Honestly, they should've bought the name and started closing stores and downsizing. I can tell you that there were 3 Movie Gallery/Hollywood stores all within a few blocks of each other in my town, which is ridiculous. Close 2 of them and merge them into one. The reason this happened is because Movie Gallery just kept acquiring smaller chains and branding them. Hollywood was a far larger task, and they obviously didn't look at the history of what happened to other ventures before them. Hollywood, on the other hand, was bankrupt because of the crazy leases and rapid expansion, building everything on debt. That's the true problem with the chains, and now since their business is on the decline, there's no true way for them to climb out of their hole.

  19.11.2007 10:47 #6

• ker7099

  Originally posted by SProdigy: Movie Gallery went bankrupt because they purchased Hollywood, which was FAR in the hole. Honestly, they should've bought the name and started closing stores and downsizing. I can tell you that there were 3 Movie Gallery/Hollywood stores all within a few blocks of each other in my town, which is ridiculous. Close 2 of them and merge them into one. The reason this happened is because Movie Gallery just kept acquiring smaller chains and branding them. Hollywood was a far larger task, and they obviously didn't look at the history of what happened to other ventures before them. Hollywood, on the other hand, was bankrupt because of the crazy leases and rapid expansion, building everything on debt. That's the true problem with the chains, and now since their business is on the decline, there's no true way for them to climb out of their hole.I agree with all but the part about Hollywood being bankrupt. I don't ever recall them going bankrupt in all the years I was there. I remember receiving the memo from Movie Gallery informing it's employees it was filling bankruptcy, just recently of course, but never from Hollywood and you can be sure that we would have known since it is something that get's reported and since every store was subscribed to multiple video trade mags.

  19.11.2007 16:08 #7

• SProdigy

  Hollywood filed for some type of bankruptcy protection years ago. I was working at the chain when it happened. I'm not sure if they went through with it, but there was some form of restructuring of their finances, and they were no longer allowed to borrow money to build new stores. If you notice, the newer Hollywood stores are in plazas, whereas the originals are stand-alone buildings. They built the stand-alones, but still had to pay a lease on the land they were built on.

  19.11.2007 16:55 #8

• ker7099

  I found what you were talking about and your right. About 2000 most thought the company was on the verge of bankruptcy but they were able to turn it around and in Oct 2002, after a record quarter, claimed they were no longer on that downward path and predicted growth in the future. But as all of us know, right afterwards began their spiral down, yet again.

  19.11.2007 17:19 #9

• borhan9

  Blockbuster may just need to partner with some other company to improve their situation.

  17.12.2007 05:23 #10