Blockbuster completely "running out of money"

According to the NYPost, Blockbuster is on its last legs, and is looking for an equity partner as it runs completely out of money.

Citing insider sources, Blockbuster needs $213.5 million in cash to pay off loans and interest for 2010, with a similar amount coming due in 2011. According to latest financials, the company only has about $211 million in cash, and is expected to lose as much as $120 million in 2010, leaving them with no ability to pay off the loans unless they sell more of their assets, or complete larger cost cutting measures.

After the report, Blockbuster CEO Jim Keyes disagreed with the assessment: "All your numbers are wrong. They bear no resemblance to any materials we have in the market." Any talks with private equity firms are for "strategic alternatives," not to add capital infusions.

In February, Blockbuster said they owed $105 million in interest payments for 2010, but did not add what they needed to pay in principal.

Written by: Andre Yoskowitz @ 8 Mar 2010 21:30

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34 comments

devingman

Regardless if the numbers are wrong, Blockbuster is doomed to fail unless they can react to the emerging markets of streaming video ala Netflix, and the dvd kiosks Redbox has put on seemingly every street corner.

Lose the brick and mortar stores

8.3.2010 22:22 #1

jony218

I'm surprise they aren't doing better. In california blockbusters main competitior "hollywood video" are closing down. That should actually be helping blockbuster.
Who would've thought "netflix" was going to be the "last man standing".

8.3.2010 23:05 #2

KillerBug

Originally posted by jony218: I'm surprise they aren't doing better. In california blockbusters main competitior "hollywood video" are closing down. That should actually be helping blockbuster.
Who would've thought "netflix" was going to be the "last man standing".This just shows that the whole model of a video rental store is obsolite. Redbox has almost as many movies as an entire blockbuster, with lower prices, more convenient locations, and better hours. Why would anyone still go to blockbuster?

They better hope that either redbox or netflix buys them.

8.3.2010 23:37 #3

ntense69

i used to go to blockbusters stores back in the late 90s early 2000's when they had great deals like 4 or 5 movies at a time or something like that now its 1 or 2 at a time but the past 2 or 3 years i been using blockbuster online....if they go broke which in the end they will..... If ya can stream from netflix stead of going to a local store in my case its 30 minutes away it works out for me plus ya can get stuff through the mail too lol

9.3.2010 01:00 #4

tnt1125

Why would someone pay $4-$4.75 to rent a movie at BB. Redbox is much cheaper, even BB by mail is cheaper if you rent more than 4 movies a month. I average 12 to 15 a month through the mail and pay $16.95/month.

9.3.2010 01:34 #5

elbald90

i last used blockbuster about 3 years ago when the local video shop shut down but the prices of rentals really put me off , why rent films for 2 nights ? id rather have it cheaper and for one night only . im afraid its bittorrent all the way for me now.

9.3.2010 02:27 #6

KSib

You can always go to Family Video if you have one.

9.3.2010 04:45 #7

dsguardin

First off, I do agree that Blockbuster needs to step up their game and figure out a way to really compete with Netflix and Redbox. Personally, I use both Netflix and Blockbuster, and I'm possibly one of the few people on here that supports Blockbuster. The reason why, is because of their in-store movie pass. After taxes, it's about $32 a month, I can have two of any DVD or Blu Ray movies out at a time, and assuming I were to go even once a day to switch out movies (which I don't always do), that's about 60 movies for $32. Not a bad deal. I do like Redbox, but not really crazy about trying to schedule my day around returning the DVD by 9pm the next night. (I work in the TV biz, so hours are long.)

By the way, before anyone jumps down my throat - No, I do not work for Blockbuster, and no, I'm not trying to advertise for them. I'm just saying that for my own selfish reasons, I like Netflix's prices and selection, and I like Blockbuster's in-store pass and I'd like to see them both around for a long time.

9.3.2010 04:54 #8

slickwill

RedBox is like the new kind of prostitute that is standing at every corner, willing to give it to its' customers 24/7, and everyone wants to stick their credit cards in it and get some.

If BlockBuster shuts down, where is everyone going to get their video-game-rental fix? Are they going to have the resort to the Duopoly service of GameFly & Gamerang?

9.3.2010 05:41 #9

emugamer

Originally posted by slickwill: RedBox is like the new kind of prostitute that is standing at every corner, willing to give it to its' customers 24/7, and everyone wants to stick their credit cards in it and get some.

If BlockBuster shuts down, where is everyone going to get their video-game-rental fix? Are they going to have the resort to the Duopoly service of GameFly & Gamerang?Haven't tried RedBox. Don't see a need to, but it seems to be doing well.

What are Blockbuster's video game rental fees now? It's been a few years since I rented a game from them. Last I went, it came to $8 for 3 days. It may have incresed to 5 days. New games would never be in stock. I found it better just to buy new and sell after a month of heavy playing. On average I would lose about $15. But that would be much better than a 5-day rental. I think they had different gamer rental programs with a flat fee, but I never looked into it.

My life is too busy to stop off at a B&M store for media anyway. Everything I do is online if at all possible. I come home to Blu Rays/DVD's in the mail. I stream TV episodes. I point and click on Amazon. Blockbuster does bring back memories though. Those late night movie runs with friends, walking up and down the isle pointing out classics, making fun of movies. Maybe I'm just an old fart now, but I see no use for Blockbuster if they can't adapt to the changing times.

9.3.2010 08:52 #10

mitchst

Here's What Blockbuster need to do.

-Have one unified Blockbuster subscription which can be used online and instore.
-Expand online rentals to games and other products.
-Allow users of online rentals to return them instore (and vice versa).
-have an online streaming service, with full crossbrowser support so content can be watched on any browser (PS3?) (this is the future imo)
-Compete with with Apple-TV. Make there own "Block-BOX" and stream content and rentals to tvs via the internet.

Just few things off the top of my head, there are so many ways blockbuster could go, but they're stuck way to much in the '90s

9.3.2010 08:53 #11

lxhotboy

I like Redbox myself but blockbuster is still necessity bc you can't find the older DVDs in a Redbox. I loved Star Wars and rented the first three for me and my family to watch. I've seen them when I was a kid but my wife and kids have never seen them. Also I am planning to rent the last three releases in the series bc I have never seen them myself.

Don't know about you guys but here in my area the new releases are never in rebox on the dates they are released. I wanted to watch 2012 but despite he DVD being out for about 5 days already, and the release wall having it posted and to be released on that certain date they are never in the rebox. That sucks really bad. That's another area blockbuster excells.

9.3.2010 09:09 #12

ZippyDSM

9.3.2010 10:13 #13

garmoon

Last week while in BB, they informed me that rentals are now due back on fifth day. The late charge is $5 a/day. Sorta indicates the end is getting near.

9.3.2010 11:18 #14

SomeBozo

R.I.P. BlockBuster!

9.3.2010 12:12 #15

SimonMagn

Originally posted by garmoon: Last week while in BB, they informed me that rentals are now due back on fifth day. The late charge is $5 a/day. Sorta indicates the end is getting near.Amazing how people do not understand the rental terms...

3.99/movie for 4 days. (Works out to $1.00/day) Amazingly the same as redbox. The only difference being at blockbuster, you have to rent for a 4 day minimum. Each movie is $1.00/day beyond the first 4 days. Still works out the same as redbox for longer than 4 day rental...

Also, redbox has slowly given in to the Production company demands that they must wait 28 days for new releases...

As always, beauty is on the eye of the beholder. What company is better for you is based soley on your rental habits/needs. Many people prefer the 'by mail' while others like to have a movie right when they want it, not waitng for mail. To each his own.

John

9.3.2010 12:18 #16

SimonMagn

Quote:Originally posted by slickwill: RedBox is like the new kind of prostitute that is standing at every corner, willing to give it to its' customers 24/7, and everyone wants to stick their credit cards in it and get some.

If BlockBuster shuts down, where is everyone going to get their video-game-rental fix? Are they going to have the resort to the Duopoly service of GameFly & Gamerang?Haven't tried RedBox. Don't see a need to, but it seems to be doing well.

What are Blockbuster's video game rental fees now? It's been a few years since I rented a game from them. Last I went, it came to $8 for 3 days. It may have incresed to 5 days. New games would never be in stock. I found it better just to buy new and sell after a month of heavy playing. On average I would lose about $15. But that would be much better than a 5-day rental. I think they had different gamer rental programs with a flat fee, but I never looked into it.

My life is too busy to stop off at a B&M store for media anyway. Everything I do is online if at all possible. I come home to Blu Rays/DVD's in the mail. I stream TV episodes. I point and click on Amazon. Blockbuster does bring back memories though. Those late night movie runs with friends, walking up and down the isle pointing out classics, making fun of movies. Maybe I'm just an old fart now, but I see no use for Blockbuster if they can't adapt to the changing times.They do have flat fee rental for games and movies. Real reson for out of stock items is no late fees. (Previously) you can keep a game or movie for 30 days and pay only $1.25 extra. People took heavy advantage of this policy.

9.3.2010 12:56 #17

TBandit

The only reason i'd go to blockbuster would be to rent out a game if I was really bored.

9.3.2010 13:42 #18

DVDBack23

Quote:
Amazing how people do not understand the rental terms...

3.99/movie for 4 days. (Works out to $1.00/day) Amazingly the same as redbox. The only difference being at blockbuster, you have to rent for a 4 day minimum. Each movie is $1.00/day beyond the first 4 days. Still works out the same as redbox for longer than 4 day rental...The truth is embedded in there. Redbox has no minimums. How many people do you know go out and rent a movie and then take 4 days to watch it??

9.3.2010 14:16 #19

SimonMagn

Many Many Many,,,,,,,,I worked at blockbuster for quite some time. A vast majority of people took much longer than 4 days to bring it back. We had people on movie passes and game passes that took a single game or movie out and returned them 3 months later, paying 21.99 month ....

In the end, it is the laziness/forgetfullness or whatever of the customer that causes lates fees...

John

9.3.2010 14:28 #20

emugamer

Originally posted by SimonMagn: They do have flat fee rental for games and movies. Real reson for out of stock items is no late fees. (Previously) you can keep a game or movie for 30 days and pay only $1.25 extra. People took heavy advantage of this policy.Yeah, I heard about it, but I guess it came on the scene after I had given up on it.

Originally posted by SimonMagn: Many Many Many,,,,,,,,I worked at blockbuster for quite some time. A vast majority of people took much longer than 4 days to bring it back. We had people on movie passes and game passes that took a single game or movie out and returned them 3 months later, paying 21.99 month ....

In the end, it is the laziness/forgetfullness or whatever of the customer that causes lates fees...

JohnIn the end, it's a business model that became outdated. People's needs and habits changed. People don't take 4 days to watch a movie. They most likely watch it the first night and then forget to get it back on time. Those people paying late fees are the ones who jumped ship for alternatives, Netflix being the main one.

9.3.2010 15:38 #21

SimonMagn

Quote:Originally posted by SimonMagn: They do have flat fee rental for games and movies. Real reson for out of stock items is no late fees. (Previously) you can keep a game or movie for 30 days and pay only $1.25 extra. People took heavy advantage of this policy.Yeah, I heard about it, but I guess it came on the scene after I had given up on it.

Originally posted by SimonMagn: Many Many Many,,,,,,,,I worked at blockbuster for quite some time. A vast majority of people took much longer than 4 days to bring it back. We had people on movie passes and game passes that took a single game or movie out and returned them 3 months later, paying 21.99 month ....

In the end, it is the laziness/forgetfullness or whatever of the customer that causes lates fees...

JohnIn the end, it's a business model that became outdated. People's needs and habits changed. People don't take 4 days to watch a movie. They most likely watch it the first night and then forget to get it back on time. Those people paying late fees are the ones who jumped ship for alternatives, Netflix being the main one.Yep, definitley many people did that. But you would be suprised at how many people stayed with blockbuster AND their bad habits. And most definitley they watched and forgot!! But also, when the rentals were 2 days (for new releases), a surprising number of them would rent 5-6 new releases at a time. Then they would have late fees on all of them because it takes 5-6 nights to watch, but they only make 1 trip to bring them all back!!!

We'll see if they can make a comeback. Would like to see that if only for the 35,000+ people they employ...

9.3.2010 16:27 #22

emugamer

Blockbuster will make a great case study for business majors.

9.3.2010 18:21 #23

DVDBack23

Originally posted by SimonMagn: Many Many Many,,,,,,,,I worked at blockbuster for quite some time. A vast majority of people took much longer than 4 days to bring it back. We had people on movie passes and game passes that took a single game or movie out and returned them 3 months later, paying 21.99 month ....

In the end, it is the laziness/forgetfullness or whatever of the customer that causes lates fees...

JohnInteresting to know that some people are so forgetful/stupid as to rent the movie long enough that it costs them more than going out and purchasing it new, haha.

9.3.2010 20:57 #24

SomeBozo

I remember one rental's late fees came to $186.00, i was alarmed to see they got that high. Upon visiting the store and explaining to the manager i had returned it... The manager was like "Ya sure you did, we can check the wall for the movie...". Immediately the manager found the video with the corresponding serial number they reported I hadn't returned... After that experience i refused to rent anything from Blockbuster. I wonder how many people would have just paid the late fees and not stood up to a manager saying "Ya sure you returned it...".

Another reason Netflix is my preferred rental system. Even Redbox you can get late fees?

9.3.2010 21:51 #25

Beachman

actually i dont know why netflix is doing so well, i have subscribed to both and i found blockbuster online far superior.. anyways.. one mans opinion

9.3.2010 22:38 #26

SomeBozo

I think the differences you might see between NetFlix && Blockbuster is the location where you live and the locality of the disribution centers for each. Netflix has a distribution center in my town drop them in the mail today, then arrive to them the next day and i get the new ones the next day. So I drop them in the mail Monday and receive the next ones on Wednesday. I know from talking with other co-workers blockbuster in my area is nowhere near as good as Netflix.

So the bottom line which one is better for you depends on where you live and your locality to the respective distribution/collection centers for each..

9.3.2010 23:05 #27

KillerBug

Originally posted by Beachman: actually i dont know why netflix is doing so well, i have subscribed to both and i found blockbuster online far superior.. anyways.. one mans opinionNetflix has a much better selection of DVD, BluRay, and Streaming titles...that is why they are doing so well. Personaly, netflix is very slow in my city, i only get about 20 DVDs a month on the 3 dvd plan...but I get the DVDs I want, and I watch dozens of streaming movies on my PC and PS3.

I think another nail in Blockbuster online's coffin is how blockbuster has always treated their customers. Charging outrageous late fees, high rental fees, and then making up fees, not telling you about them, and billing you a year later with 80,000% interest. Just about everyone in the country has gone through this kind of mess with blockbuster, and most of them will never give this corporation a chance to get their business again.

As for game rentals, there is always gamefly, and I bet redbox could make a killing if they setup "BLUbox" and filled it with games.

[DFI M2RS] [Athlon 9950] [ATI 3870HD] [Hauppauge WinTV-HVR-1600] [6GB Corsair DDR2] [4x Seagate ST31500341AS + 3ware 9690SA = 4.5TB RAID5] [2x Seagate 750GB + 2x Seagate 500GB + Adaptec 1430SA = 750GB RAID1 + 500GB RAID1] [Intel Gigabit NIC (PCI)] [LG 20X Lightscribe DVDR] [Coolmax 1200w Power Supply] [Logitech G15(first edition)] [Logitech G5(Second Edition)] [320GB Hitachi Boot] [320GB Hitachi Temp/Swap] [Modified and overgrown 4U Rackmount case] [22" & 24" screens mounted overhead] [Perfect Chair 085] [Logitech 5.1 Audio] [Windows 7 RC1]

9.3.2010 23:29 #28

SimonMagn

Quote:Originally posted by SimonMagn: Many Many Many,,,,,,,,I worked at blockbuster for quite some time. A vast majority of people took much longer than 4 days to bring it back. We had people on movie passes and game passes that took a single game or movie out and returned them 3 months later, paying 21.99 month ....

In the end, it is the laziness/forgetfullness or whatever of the customer that causes lates fees...

JohnInteresting to know that some people are so forgetful/stupid as to rent the movie long enough that it costs them more than going out and purchasing it new, haha.We actually had a customer that had the same game out for over 6 months...21.99 per month, He paid $134.00 for the game over that period and then had to return it. We called many times to warn him but later found that he had put the wrong phone number on his blockbuster account, the people we were leaving voice mail with obviously did not care enough to let us know it was a wrong number.

10.3.2010 10:16 #29

aftdnick

I've always liked blockbuster, but I haven't been there in almost 6 months now. Between the internet and redbox (especially with the free rental codes), I'm covered.

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10.3.2010 18:03 #30

garmoon

BB does have one big positive

You get the newest releases on the day they are released!

10.3.2010 18:06 #31

lawndog

Originally posted by mitchst: Here's What Blockbuster need to do.

-Have one unified Blockbuster subscription which can be used online and instore.
-Expand online rentals to games and other products.
-Allow users of online rentals to return them instore (and vice versa).
-have an online streaming service, with full crossbrowser support so content can be watched on any browser (PS3?) (this is the future imo)
-Compete with with Apple-TV. Make there own "Block-BOX" and stream content and rentals to tvs via the internet.

Just few things off the top of my head, there are so many ways blockbuster could go, but they're stuck way to much in the '90s1st is done
2nd I believe, not certain is done
3rd Is done, I rent 2 online, return to the store, they give me 2 until my new 2 come in the mail (no extra charge)
4th Don't know
5th Don't know

BUT I have noticed stand alone BBs inside the local Gas stations now much like redbox is. Gas Station is either Quicktrip or Race Trac

I'd hate to see Blockbuster go down to be honest. Redbox does NOT have alot of the new releases. While blockbuster does. I do like going to block buster, I haven't been in awhile, but its a nice ez way to see old movies, or when your bored and do want a movie but not sure what you want. Yes I know there are other local smaller stores, but lets be real.
If blockbuster goes down, what do you think will happen at Redbox and at your local shops. With out the compitiotion of BB they will be able to raise their prices. So people can wish it all they want and bash BB. But, do you really want to see the after effect of lossing a major entity like Blockbuster??
Just my thoughts,
LD

11.3.2010 03:41 #32

Mez

The reason BB is failing is it is run by morons. They got big because they could buy more and cheaper than the little guy. The only way they fight is to copy what the competition is doing. The competition is run by smarter persons. They actually invented a new wrinkle. When they went to on line they sold to their brick and mortor customers. How stupid is that?

Because they are run by morons they really do not have a chance.

11.3.2010 09:38 #33

madr68

Well in canada if BB sells or closes stores, Ted Rogers(Rogers Video) will probably buy up some BB Stores or maybe even Bell, They just bought The Source once known as(Radioshack) in Canada.

11.3.2010 09:51 #34

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