It seems that someone at the Blockbuster headquarters is going around hitting the employees over the head with a mallet, because that’s about the only way this company could still be upbeat about its future prospects.
The chain of Blockbuster video stores has been hovering near bankruptcy for the majority of this year. Many people are saying that the chain may shut down in 2011, and we have to say that we kind of agree with this assessment. The company was delisted from the New York Stock Exchange on July 1st, and now trades over-the-counter. This was followed up by missing a payment of $42.4 million to bondholders on Aug. 13th, which has now been extended to Sept. 30th, but even that seems questionable.
Yet, despite all this gloom and doom, Blockbuster’s head of digital strategy Kevin Lewis spoke with Fast Company last week about how the failing brand is ready to take on Netflix and Apple in the digital media arena. Of course, this is a company where CEO Jim Keyes has said getting Netflix to work on his Nintendo Wii makes “head hurt to think about.” Yeah, this digital battle is going to go swimmingly.
In short, the interview boiled down to Mr. Lewis saying “Blockbuster good, Apple & Netflix bad”, and then he threw out a whole bunch of buzzwords about how the company’s video service will be everywhere, and on every device, despite the fact it is currently in one line of Blu-ray players and on the Droid X phone. He promises more partnerships are coming, but you have to wonder why any company in their right mind would partner up with this brand at this point.
The stock is currently trading around 11 cents, and there is debt somewhere in the range of $1 billion on the table. Not only is there talk of chapter 11 bankruptcy protection, but also chapter 7 liquidation. This is not a cart a lot of companies would want to hook their horse up to.
To top this all off, the digital media service, the thing that is making them think they can pull this all back from the brink, doesn’t stream media, it makes you download it. You can’t start a movie on one device and then move to another to pick up where you left off, something that just about every piece of digital media is doing these days. Mr. Lewis claims that this is something customers want, but I personally have a hard time believing that.
It’s actually reached a point of sadness when it comes to the tale of Blockbuster. It seems that everyone in the world can see what is going on except for them. Sure every company wants to save itself, but there is a point where you finally have to cut your loses and walk away. There is a point where delaying the inevitable just becomes painful for those on the inside, as well as the spectators on the outside. The video rental store as we knew it, is a dead concept. Could someone please fill Blockbuster in on this now?
What say you? Has Blockbuster over stayed its welcome? Do you agree with its idea we all want to download movies as opposed to streaming them?