Blockbuster Express: Will the Blockbuster Express new kiosk model save their dying business?
What is Blockbuster Express?
Blockbuster Express is using the same business model as Redbox, where they allow customers to rent movies for $1.00 a night. The user can either log into their website and rent a movie and find a location to pick it up, or they can just go directly to the kiosk and rent the movie. I have also read that Blockbuster plans to implement kiosks that alows the customer to download movies to a memory card, which many TVs now have.
The question is, Why? If a consumer knows how to use a memory card with their TV, why wouldn't they just find away to stream it from their computer to their TV. Streaming will be the wave of the future, not memory cards.
After doing further research, I found that the kiosks Blockbuster is now using have been around since 2005, and are owned and operated by NCR. They have been renting movies through these kiosks under the brand "The New Release". Blockbuster is just licensing their name out to make a quick buck. However, "Blockbuster Express" is actually a totally different business than Blockbuster's in-store and mail order video rental business. This will just confuse people.
It may be a good business model to have multiple channels (in-store, mail order, and kiosk). However, if you rent a movie online or pick it up in-store. You can't return it to the kiosk, or if I rent from the kiosk I can't return in-store. This is just weird and dilutes their brand. This is two different companies using the same name just with Express added. We'll see if it works for them.
Also, if you haven't checked out Netflix or Redbox i suggest you try them. I like Netflix in general for just movies and I use Redbox for all the new releases. They both are very affordable and profitable companies.
In 2010, Blockbuster's stock price continues to plummet, from $1.36 on September 15, 2009 to $0.36 cents on April 15, 2010. We have seen Blockbuster's business continue to decline, since Netflix and Redbox entered the video rental industry over the last decade. Blockbuster was once on top and putting their competitors out of business. Today, it's a different story and they're the holding on by a thread, treading the waters of bankruptcy.
Will Blockbuster's new marketing strategy make them a competitor once again or will see a similar fate that they showed their competitors years ago?
Over the past couple months, Blockbuster has decided to expand their presence in the kiosk game with new kiosks popping up branded Blockbuster Express. Redbox has proved to create a profitable business model that had been very successful. This had me scratching my head.
I think that the kiosk business is not a bad idea, however as more individuals buy computers (since the price has dropped drastically over the past two years), I wonder if this kiosk model will survive. This works great for Redbox now, and since Coinstar owns them it makes sense; they can service both machines at the same time. Blockbuster has partnered (Blockbuster is licensing their name) up with NPR to bring these services to the market and mainly to convenience stores. Is this a good strategy, piggybacking off their competitors and trying to make a better product or do they need a game changer? This will be something that will be proved over the next few years.
- Blockbuster Bankruptcy: A Decade of Decline | Fast Company
Months ago, the mere mention of bankruptcy in an article about Blockbuster would provoke seething responses from company reps. On more than one occasion, I received fuming messages from Blockbuster about how bankruptcy was a "worst-case scenario" tha
- Blockbuster Inc. - Wikipedia, the free encyclopedia
- Inside Blockbuster Express
Discussion of Blockbuster, Blockbuster Express, and DVD Kiosks
- Find a DVD Rental Machine, Self-Serve DVD Kiosk - BLOCKBUSTER Express
Add a DVD rental movie to your grocery list! Find the Blockbuster Express DVD machine nearest you for the latest movie releases in the U.S. and Canada. Interactive map and directions.
My Rant about the Blockbuster Express
I just want Blockbuster to go away!
For years I watched them bully their way to the top, and after they were on the top they just walked all over their loyal customers with late fee after late fee. On top of it they would not work with their customers to fix these fees, instead they just let them build up, and when the fees were high enough they would eventually call to collect.
This left a BAD TASTE in my mouth and I will never rent a movie from them again. I joined Netflix years ago (the BEST DECISION EVER) and have never had any problems with them.
In Conclusion, I think that Blockbuster is a little to late to the game. Netflix has too many loyal customers and I don't see Blockbuster stealing them.
Also, I remember those late fees...don't you?
Blockbuster Express - A Timeline of The Fall of Blockbuster
I found this interesting timeline posted on Fastcompany's website by Austin Carr. I thought it was pretty interesting to see the rise and fall of a giant.
1985: First Blockbuster store opens in Dallas.
1994: Viacom acquires Blockbuster for $8.4 billion.
1997: Reed Hastings returns Apollo 13 to Blockbuster six weeks overdue, and is dismayed by the $40 late fee.
1998: Reed Hastings founds Netflix.
1999: Viacom holds Blockbuster IPO, valued at up to $4.8 billion.
2000: Blockbuster declines several offers to purchase Netflix for a mere $50 million. Instead, the company inks a 20-year deal to deliver on-demand movies with Enron Broadband Services, a subsidiary of energy trading giant Enron.
2001: Enron files for bankruptcy amid accounting scandal.
2002: Blockbuster debuts Super Bowl ad starring the voices of Jim Belushi and James Woods, as a rabbit and a guinea pig. The company posts a $1.6 billion loss.
2003: Netflix posts first profit, earning $6.5 million on revenues of $272 million. Redbox launches a kiosk rental service.
2004: Blockbuster enters online DVD rental market. Netflix CEO Reed Hastings tells analysts in an earnings call, "In the last six months, Blockbuster has thrown everything but the kitchen sink at us." The following day, Hastings receives a package from Blockbuster. Inside: a kitchen sink.
2005: Blockbuster launches a marketing campaign touting its new "No Late Fees" policy. Subsequently, 48 states launch investigations into the program, charging Blockbuster with misrepresenting its late fee policy to customers. Blockbuster settles for $650,000.
2006: Blockbuster, now valued at $500 million, surpasses its goal of two million subscribers for its online platform. Netflix reaches 6.3 million subscribers by December.
2007: Blockbuster hires new CEO Jim Keyes, formerly of 7-Eleven. Keyes decides to roll back the company's Total Access plans. "Clearly our spending on that one channel was exceeding our returns," he said during a company earnings call. After losing a half-million subscribers in the third quarter, Blockbuster announces it will no longer report its subscriber count.
2008: Blockbuster proposes buying struggling electronics chain Circuit City. Blockbuster soon withdraws its offer after it's universally panned. Circuit City files for bankruptcy in November. Keyes also expresses doubt about Netflix in an interview: "I've been frankly confused by this fascination that everybody has with Netflix...Netflix doesn't really have or do anything that we can't or don't already do ourselves."
2009: Blockbuster rolls out Blockbuster Express, its kiosk system designed to compete with Redbox.
March 2010: Blockbuster touts 28-day exclusive window over Netflix for new releases. The company also reintroduces late fees, which had been costing the company $300 million in revenue annually.
May 2010: In an interview with Fast Company, Jim Keyes is asked wheather Blockbuster's financial troubles were due in part to Netflix's success. "No, I don’t know where that comes from," he says. Keyes denies his company is going bankrupt.
June 2010: Keyes compares Blockbuster to Apple, claiming that its On Demand service is the equivalent of the iMac.
July 2010: Blockbuster launchesDroid X app. Blockbuster is de-listed from the New York Stock Exchange after shares hit all time lows.
August 2010: Though ailing from a debt of $900 million, Blockbuster's head of digital strategy explains, "We're strategically better positioned than almost anybody out there. Never in my wildest dreams would I have aimed this high." Blockbuster adds video games to by-mail subscription plans for no additional cost, but neglects to mention that new releases will not be available for three months.
September 2010: Drowned in revenue losses of $1.1 billion, sources say Blockbuster plans to file for bankruptcy. The company is valued at just $24 million.