Blockbuster Bleeding DVD-By-Mail Subscribers

Davis Freeberg —  August 23, 2009 — 1 Comment

blockbuster-p2p
Photo by RocketRaccoon

Just in case you think Blockbuster’s problems are isolated to a declining video store industry, I’d encourage you to take a closer look at their latest 10-Q filing. Despite there being clear growth in the DVD by mail category, Blockbuster is hemorrhaging subscribers. In fact, the percentage of people giving up on BBI’s by mail service is almost as high as the percentage of people giving up on their video stores. According to their 10-Q,

Rental revenues decreased mainly as a result of: a $76.3 million decrease in by-mail revenues driven by a 30% average decline in by-mail subscribers, which was more than offset by related cost reductions described below under “Domestic—Gross profit;

At one point in early 2007, Blockbuster had the pedal on the metal and was boasting of having close to 3 million subscribers. Since then, they’ve been understandably quiet, but I had no idea things were this bad until I read their most recent filing.

After piecing through these various filings, I’ve come up with an estimate of only 1 – 1.25 million current subs.

Read the rest of this entry »

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

One response to Blockbuster Bleeding DVD-By-Mail Subscribers

  1. There may be a marketing lesson here. Because of its historical in-store brick and mortar operations, Blockbuster does not and will not own the necessary position in the consumer’s mind when it comes to the DVDs by mail category. That would, of course, be its competitor Netflix that owns this mental real estate. There’s something to be said for being the first to the market when it comes to positioning (not just first to enter the market). Remember the old iceberg analogy? The base of the iceberg is the category and the tip of the iceberg is the brand. When the category melts, the brand comes down with it. In terms of the in-store movie rental category, I think I feel a heatwave coming on.

Leave a Reply

*

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>