Blockbuster! Where Have You Been?

I live about five minutes from a Blockbuster and Redbox, both within the same shopping center. Blockbuster is only useful for my boyfriend who rents video games. Other than that, Redbox fulfills my need for movies. As proven by the popularity of Netflix and Redbox, blockbuster is not considered part of the movie rental market anymore. I’m only reminded of them when I pass the store on the way to Redbox or the grocery store. Then “Blockbuster to Launch first national ad campaign in three year” by Ben Fritz arrived in my LA Times Business Daily email. The gist of the article was about Blockbuster going through “Chapter 11 reorganization” and the almost $20 million federal court approved ad campaign the company launched.

I always root for the underdog and appreciate an amazing comeback but by the end of the article, I was left thinking “Blockbuster where have you been?”. I don’t know if there is some legal trap that prevented the company from putting out a campaign in three years but for three years, their competitors have gained a three year head start complete with upgraded movie rental methods. Though Blockbuster has been around longer than Redbox and Netflix, their comeback seems like a catch up. For those not familiar with Blockbuster (trust me, there are some), the company seems like the new kid on the block.

The only slight of hand for Blockbuster is getting new releases almost a month before Redbox and Netflix. Ben Fritz revealed this is only possible because “Blockbuster charges higher prices… generating more money for studios that share in the revenue.” Is it possible that a $20 million campaign, earlier releases, and higher charge will steal Netflix subscribers and Redbox consumers? Will it hand Blockbuster control of the company from bondholders? Will it keep stores open? I think not, although miracles can happen. Three years is a good head start for competitors and Blockbuster isn’t playing a good hand. For such miracles, Blockbuster is going to have to bet cautiously or hope that the river exposes some better cards.

Note: River refers to the extra two cards dealt in Texas hold ‘em poker which the player uses if it gives them a better hand