Fast Company is running an article by Austin Carr about the problems with Blockbuster's new subscription-free DVD-by-mail program. Click the link below to read the article.
"Blockbuster: Please, Please Change Your Habits"
5/05/2011
New Release Delays and Shortages at Blockbuster
A new trend seems to be developing at Blockbuster. Around February, finding new releases at least some Blockbuster stores became extraordinarily difficult. We are not talking normal shortages here. This is a stunningly low supply.
Last year, a customer could walk into a Blockbuster on a Tuesday night and almost always find the DVDs that came out that day. They would be gone by Thursday night, but they were still there on Tuesday. (New releases generally become available for rental on each Tuesday.) Now, the new releases are gone by Tuesday afternoon. Even after a particular title has been out for a week or more, the title will be completely gone or in very low supply. The odd thing is that the Blockbuster store may try to cover up the low supply by putting out dozens of those placeholders that look like the DVD jewel case. This could give the illusion that the store owns many copies of a title, but all of the copies are checked out. Given the low quantities of new releases in stock, and the unremarkable flow of customers, one might wonder if Blockbuster is actually purchasing very limited numbers of each title while pretending to have normal quantities in stock.
Now that is just one suspicious thing going on in some stores. Something far more serious also seems to be beginning. Since March, some new releases are not available at Blockbuster stores or Blockbuster Online. When questioned about why the new releases are not in stock, Blockbuster employees are claiming the titles are being held up by the studios, but this is very unusual. New releases for major movies almost always come out on time. It makes no sense that the studios would suddenly be incapable of delivering DVDs on time.
What makes more sense is that 1) Blockbuster's suppliers are withholding shipments because Blockbuster is not paying them quickly enough, 2) the studios are taking advantage of Blockbuster's weakened state and deliberately delaying shipments in an attempt to motivate consumers to buy new releases rather than waiting to rent them, or 3) the studios are offering price incentives that encourage Blockbuster to delay purchases of new titles.
At this point, the cause is completely unknown to the public, but something suspicious is going on at Blockbuster. Regardless, Blockbuster needs to remedy this supply problem immediately. One of the few benefits that Blockbuster has to offer its customers is having new releases the day they come out. Netflix and Redbox have already conspired with the studios to impose artificial release delays. If Blockbuster cannot have the movies before the competitors, there is no way Blockbuster can even think about being competitive.
Last year, a customer could walk into a Blockbuster on a Tuesday night and almost always find the DVDs that came out that day. They would be gone by Thursday night, but they were still there on Tuesday. (New releases generally become available for rental on each Tuesday.) Now, the new releases are gone by Tuesday afternoon. Even after a particular title has been out for a week or more, the title will be completely gone or in very low supply. The odd thing is that the Blockbuster store may try to cover up the low supply by putting out dozens of those placeholders that look like the DVD jewel case. This could give the illusion that the store owns many copies of a title, but all of the copies are checked out. Given the low quantities of new releases in stock, and the unremarkable flow of customers, one might wonder if Blockbuster is actually purchasing very limited numbers of each title while pretending to have normal quantities in stock.
Now that is just one suspicious thing going on in some stores. Something far more serious also seems to be beginning. Since March, some new releases are not available at Blockbuster stores or Blockbuster Online. When questioned about why the new releases are not in stock, Blockbuster employees are claiming the titles are being held up by the studios, but this is very unusual. New releases for major movies almost always come out on time. It makes no sense that the studios would suddenly be incapable of delivering DVDs on time.
What makes more sense is that 1) Blockbuster's suppliers are withholding shipments because Blockbuster is not paying them quickly enough, 2) the studios are taking advantage of Blockbuster's weakened state and deliberately delaying shipments in an attempt to motivate consumers to buy new releases rather than waiting to rent them, or 3) the studios are offering price incentives that encourage Blockbuster to delay purchases of new titles.
At this point, the cause is completely unknown to the public, but something suspicious is going on at Blockbuster. Regardless, Blockbuster needs to remedy this supply problem immediately. One of the few benefits that Blockbuster has to offer its customers is having new releases the day they come out. Netflix and Redbox have already conspired with the studios to impose artificial release delays. If Blockbuster cannot have the movies before the competitors, there is no way Blockbuster can even think about being competitive.
4/25/2011
Blockbuster Store Closings Create Privacy Concerns
Beth Givens with Privacy Rights Clearinghouse was recently walking by a Blockbuster store in Mission Valley, San Diego which happened to be closing down. Outside of the store, Givens found a box of case files that contained Blockbuster employee records, such as job applications and detailed employment termination documents. The documents contained private information such as social security numbers, full names, etc. There are probably signatures and birthdays too. This could be a gold mine for an identity thief or a wonderful supply of embarrassing employment information.
Luckily, Givens found the employee files before a criminal found them. Givens plans to return the files to Blockbuster, and it appears no harm was done in this case, but this incident should sound an alarm.
Blockbuster stores are closing all over the country. With Dish Network taking over, many more Blockbusters are likely to be closing later this year. If Blockbuster is mishandling files from abandoned stores, not only are the employees at risk, but so are the customers.
When you opened that Blockbuster account years and years ago, do you remember exactly what information you put on the account application form? Where is that form now? Could an identity thief use that form to steal your identity? What about your rental records, credit card information, address, etc.? What is Blockbuster doing to make sure this information is not going to fall into the wrong hands?
With all of these stores closing, Blockbuster/Dish Network needs to get on top of this issue. When people trust a company with their privacy, that company has a duty to protect the information of its customers.
Luckily, Givens found the employee files before a criminal found them. Givens plans to return the files to Blockbuster, and it appears no harm was done in this case, but this incident should sound an alarm.
Blockbuster stores are closing all over the country. With Dish Network taking over, many more Blockbusters are likely to be closing later this year. If Blockbuster is mishandling files from abandoned stores, not only are the employees at risk, but so are the customers.
When you opened that Blockbuster account years and years ago, do you remember exactly what information you put on the account application form? Where is that form now? Could an identity thief use that form to steal your identity? What about your rental records, credit card information, address, etc.? What is Blockbuster doing to make sure this information is not going to fall into the wrong hands?
With all of these stores closing, Blockbuster/Dish Network needs to get on top of this issue. When people trust a company with their privacy, that company has a duty to protect the information of its customers.
4/06/2011
Sold! Dish Network Buys Blockbuster at Auction
For some reason, Dish Network has chosen to drop $320 million on the purchase of Blockbuster, Inc. No one is quite sure what Dish Network intends to do with Blockbuster, but one might imagine that Dish Network could use this as an opportunity to create a big brick-and-mortar retail presence. Dish Network could be trying to position itself to better compete with Netflix by being on the street and in the mail in addition to the skies.
By taking over Blockbuster's existing infrastructure, retail presence, customer base, relationship with movie studios, and merchandise supply channels, Dish Network now has the tools to become a potential threat to companies like Netflix. Dish Network could now be in the unique position of being able to deliver all kinds of movies to all kinds of consumers in all kinds of different ways. What other company has all of that? Redbox has the rental kiosks. Netflix has DVDs by mail and streaming video. Many retail stores sell videos. The pay TV channels and many other services offer video-on-demand. Up until now, no one company has been able to offer it all, and no one company has been able to reach what is nearly the entire market of video renters/buyers. Perhaps Dish Network will try to be the first to make that happen.
Considering the harsh realities that Blockbuster had been facing, this deal is probably as good as it could get for Blockbuster. If Dish Network does wish to build a strong retail presence, they will probably not be liquidating Blockbuster (which had been an extremely likely possibility). If Blockbuster continues to exist in brick-and-mortar form, many Blockbuster employees may be able to hang on to their jobs for a while. Consumers will also not have to face losing one of their video rental options.
Not much is certain at this point, but the Dish Network takeover is probably being viewed as at least moderately encouraging news for anyone who likes Blockbuster or depends on the company for a living.
By taking over Blockbuster's existing infrastructure, retail presence, customer base, relationship with movie studios, and merchandise supply channels, Dish Network now has the tools to become a potential threat to companies like Netflix. Dish Network could now be in the unique position of being able to deliver all kinds of movies to all kinds of consumers in all kinds of different ways. What other company has all of that? Redbox has the rental kiosks. Netflix has DVDs by mail and streaming video. Many retail stores sell videos. The pay TV channels and many other services offer video-on-demand. Up until now, no one company has been able to offer it all, and no one company has been able to reach what is nearly the entire market of video renters/buyers. Perhaps Dish Network will try to be the first to make that happen.
Considering the harsh realities that Blockbuster had been facing, this deal is probably as good as it could get for Blockbuster. If Dish Network does wish to build a strong retail presence, they will probably not be liquidating Blockbuster (which had been an extremely likely possibility). If Blockbuster continues to exist in brick-and-mortar form, many Blockbuster employees may be able to hang on to their jobs for a while. Consumers will also not have to face losing one of their video rental options.
Not much is certain at this point, but the Dish Network takeover is probably being viewed as at least moderately encouraging news for anyone who likes Blockbuster or depends on the company for a living.
2/21/2011
Troubled Video Rental Chain for Sale
Blockbuster is up for sale, and bidders are welcome. If you have a little extra money, and you are looking to sink it into a company with a tainted brand name, a Chapter 11 filing, and no clear path for regaining its market footing, this may be your opportunity.
Seriously, the number on the table as of today is $290 million. Blockbuster is hoping to sell for at least that much. It is unclear exactly why anyone would want Blockbuster. Perhaps the purchasers are interested in liquidating the company.
How many scratched DVDs and barely touched Blu-ray discs does it take to add up to $290 million anyway? If Blockbuster can unload the used discs for an average of $5 a piece, they will need 58 million of them to hit the $290 million mark. That sure seems like a lot of used discs.
Blockbuster does have more than used video discs, however. Blockbuster has all of that overpriced candy, drinks, and popcorn. Do not forget about all of the stuffed animals, key chains, and those framed movie posters no one ever touches.
No one is sure what is going to happen to Blockbuster, but it looks like Blockbuster is moving ahead quickly. Probably, by the end of April, we will find out who is buying Blockbuster and for what price. After that, we will either be treated to a tremendous reincarnation/re-branding of Blockbuster or the most massive clearance sale of used DVDs, games, and movie-related merchandise the nation has ever seen.
The sad thing is that very few people care. Not many people were upset when Blockbuster went Chapter 11, and there will not be that many people upset if Blockbuster is transformed or liquidated. How often do you hear someone praising Blockbuster, or excited about making a trip to a Blockbuster store? It's pretty rare, isn't it? That is the real problem. Most people just do not care about Blockbuster anymore, and why should they?
Seriously, the number on the table as of today is $290 million. Blockbuster is hoping to sell for at least that much. It is unclear exactly why anyone would want Blockbuster. Perhaps the purchasers are interested in liquidating the company.
How many scratched DVDs and barely touched Blu-ray discs does it take to add up to $290 million anyway? If Blockbuster can unload the used discs for an average of $5 a piece, they will need 58 million of them to hit the $290 million mark. That sure seems like a lot of used discs.
Blockbuster does have more than used video discs, however. Blockbuster has all of that overpriced candy, drinks, and popcorn. Do not forget about all of the stuffed animals, key chains, and those framed movie posters no one ever touches.
No one is sure what is going to happen to Blockbuster, but it looks like Blockbuster is moving ahead quickly. Probably, by the end of April, we will find out who is buying Blockbuster and for what price. After that, we will either be treated to a tremendous reincarnation/re-branding of Blockbuster or the most massive clearance sale of used DVDs, games, and movie-related merchandise the nation has ever seen.
The sad thing is that very few people care. Not many people were upset when Blockbuster went Chapter 11, and there will not be that many people upset if Blockbuster is transformed or liquidated. How often do you hear someone praising Blockbuster, or excited about making a trip to a Blockbuster store? It's pretty rare, isn't it? That is the real problem. Most people just do not care about Blockbuster anymore, and why should they?
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