Friday, May 29, 2009

Blockbuster Newest Surival Strategy & My 8 Recommendations


In February I wrote, Will Blockbuster Survive in 2009? Should it? and now 4 months later, I'm still asking that same question.

Blockbuster shareholders met on Thursday with CEO Jim Keyes (and the rest of the Blockbuster board members who all were voted to retain their position in the struggling company).

According to The Hollywood Reporter, the way Blockbuster is going to try to save itself and differentiate itself from Netflix, Red Box, and Videos on Demand is by selling movie merchandise on consignment.

The company's stock (BBI) has dropped 90% in less than two years, and currently sits at 70 cents a share going into the weekend.

Film related merchandise on consignment? This sounds horrible.

I think it's going to take more than some Captain Kirk t-shirts and left over plush Samuel L. Jackson dolls to save Blockbuster.

--

Dear Jim Keyes, I think you business will be filing bankrupcy by year end. If you have a moment, may I suggest some last minute ideas I have to save your company?

1. All rentals, $1/day. I like the way Red Boxes and Movie Cube allow me to pay $1 a day. It gives me incentive to get that movie back quick enough to, which me they can have fewer copies rented out to more people. Let me pay $1 a day and maybe the velocity of videos in and out will increase. Plus, with so many neighborhood stores, it could sway some netflixers if they know they can watch the movies they want, when they want them without the "pressure" that comes from a subscription.

2. Train your staff. What differentiates Blockbuster from netflix, redbox, and video on demand is not the opportunity to sell movie junk...it's that you have live people in your stores who can recommend what movies I would like. Every other business out there has trained their staff on upselling customers -- if your staff actually made quality recommendations and were available to help I bet you could see more movies out the door.

3. Community. Get involved in the community. Libraries offer foreign film nights, cities offer movies in the park, there's mini film festivals here and there and I never see Blockbuster's name associated with these local events. Do some grass roots marketing, why doesn't blockbuster get the rights to exhibit some films in local parks and pull off some quality marketing events, remind people that Blockbuster is a part of their community.

4. If You Like Then... When I go to Borders and other bookstore/media outlets I see tons of recommendations and suggestions located on the shelves and throughout the store. Don't just expect the title and cover art to do the work for you. Help the customers know what they want...the die hard fans are probably going to have a Netflix account filled up to 500, but when Joe Six Pack goes to pick up a movie to watch with his girlfriend or Grandma Josefina, then they might need some suggestions, otherwise they're going to come home with direct to video train wreck that clutters the blockbuster shelves. I remember in the "old days" this type of information was on the back of blockbuster boxes, but it seemed like the information on the back of the boxes became worse and worse shortly after this type of information was added. How about some quality and thoughtful recommendations?

5. Encourage TV DVDs and other Series. Let me rent TV and series more efficiently than renting one disk of the 6 disk series at $5 a pop. If someone wants to rent a season of 24 or Lost they're going to be out $30 when all is said and done. Figure out a way to encourage these multi-disk rentals, not discouraging it.

6. Stores That Work Together. Blockbuster has multiple stores in multiple locations, but I hate the fact I have to return the video to the store I rented the video from. What if I rent the video on my way home from work and want to return it the following day to the store by my house. I can't...these similarly branded stores are not connected. Similarly, if one's store is out of a certain title, create a system where that store can borrow it from a local store that might have multiple copies.

7. Incentivize My Patronage. Clearly there are options, give me an excuse to chose Blockbuster, maybe a point system where my 6th rental is free, or maybe work with a major theater chain where enough rentals will get me free movie passes.

8. Think Kids. Sure you have a kid section, but do kid's ask their parents to take them to blockbuster. Take some time to figure out how the get kids to ask their parents to take them to blockbuster...maybe it'll take some 'McDonald's like thinking' - Maybe you have a kid's pack movie rental that comes with a small microwave popcorn and a toy (The Blockbuster Happy Meal, per se) or maybe a small play area in your store modeled off of the latest Pixar movie. Make your store a kid destination and parents will be walking out with movies for their kids and themselves. Plus, it passes on a culture of blockbuster that will create longevity for the company as those kids get older.

7 comments:

Moviezzz said...

Some good points. But in my area, my local BB closed a couple years ago. It won't help them here.

While I was interested in this new move of BB to sell movie items, I think they might want to rethink their entire business model.

If you look at the DVD market, after a year or so, DVDs drop to around $10 or sometimes less to buy. If you go into Wal Mart, they have bargain bins filled with $5 DVDs. I visit my Big Lots store regularly where DVDs are $3.

It just doesn't make sense to rent today.

There were never any CD rental store (and new CDs are as or even more expensive than some new releases) so why hasn't the BB model changed?

It made sense for BB to rent $80 VHS. But for $15 DVD, it really doesn't.

However this also raises the question of what is wrong with BB if it can't be profitable by renting DVDs. It only takes three rentals of a title to make money from it.

BB should seriously think about giving up the whole rental business.

William Petruzzo said...

Every time a friend and I drive by our local Blockbuster it inevitably sparks the same conversation every time: how much we prefer Redbox and Netflix to Blockbuster, even though both of those have major annoyances (i.e., can't get it right now and a really small selection).

Blockbuster would be wise to take your suggestions. I think the most important one being the $1 rentals. I don't need to keep movies for six days and I absolutely never want to spend five dollars to do it. Especially if it's just an old movie I've got an itch to watch, like Honey I Shrunk the Kids. If Blockbuster could compete with Redbox's price, I'd always pick Blockbuster, based just on selection.

But it also seems kind of stupid that Blockbuster hasn't caught up with the technology that Redbox style systems are using. Blockbuster could stop staffing so many people if they'd implement some intelligent self-checkout systems. Basically a Redbox style system, except instead of a machine retrieving the DVD, the person browses the store--which is what a lot of people love about a video store anyway. In fact, Blockbuster could retain billing information based on the customer's account number and all we might have to do is scan our member card and the DVD and we're done.

I also completely agree with you about the returning DVDs to different stores. I can remember back in the day before more convenient options arose, we used to rent movies from Blockbuster then after a week forget which local store we got it from. If you accidentally returned the movie to the wrong store, it was a nightmare. It was usually about a month before anyone figured out what happened and getting them to credit you back for all the late fees and eventual DVD purchase was like pulling teeth.

That crap alone makes me want nothing to do with the stupid company. But if they took your suggestions, I think I might, dare I say, even enjoy going there.

Anthony said...

Brilliant ideas. You should be getting a paycheck for this stuff.

I'd like to add one suggestion. One my my biggest frustrations with renting DVDs is scratched, dirty discs. I can't tell you how many times I've had a Blockbuster movie skip or freeze only to find scratches or fingerprints on it.

The Hastings chain we used in Tyler, Texas had protective coverings on their DVDs. It was a thin, clear plastic that clung to the bottom of the disc. It worked really well.

Redbox should consider using this too. People just don't take care of rental DVDs like they should.

Bennett said...

I think if they read your blog they might have a chance.

For proof, look at Barnes and Nobles. How have they survived Amazon? They use a lot of the ideas you've suggested.

I'm picturing in my head a place with a couple of small "theater" areas in the back with comfy seating, big screen and great sound. Snacks for sale of course.

They could host critic clubs, mommy clubs, youth groups, special interest groups. Really, how hard is it to sell movie culture in AMERICA? Lets start our own business.

Crystal said...

I agree with a lot of your points, but I'd just like to point out that old movies are $1.99 for five days, and kids rentals are 99 cents for five days. Some locations do have $1/day rentals for new releases, and I definitely think that they should expand that to all the stores, however new releases are $4.99/5 days, with a 5 day "grace period," so if you have trouble returning your movies on time and keep it 10 days, that's actually only 50 cents a day.

It's unfortunate that a lot of Blockbuster employees are not helpful at all, but the real resolution to that is for them to stop treating their employees so poorly. Most people who work at Blockbuster are just waiting to get the hell out of there, and that's not conducive to good customer service.

Lastly, there actually is a program called the Rewards Program, currently $5/year, that does exactly what you suggested: Rent 5, get the 6th free. Also, every month you get a coupon for a free older title and every Monday-Wednesday is rent one, get one free.

Other than that, I totally agree with everything you said.

Anonymous said...

dont give blockbuster tips. I worked there for 2 and a half years, thank god i got out of there, they're nothing but scum. im happy they're going out of business. im going to laugh in everyones face the day my old store will be borded up. I was the assistant store manager for 3 different stores. good-bye BBV, you guys deserve every piece of torture comming your way!

None said...

Thats not nice Adam

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