Blockbuster Shifting Resources from Stores to Kiosks
By George Anderson
Blockbuster is getting hammered by the likes of Netflix and Redbox. In
the past, the movie and video game rental company created its own Netflix-like
service with mixed results and it has also invested in building up
its kiosk business a la Redbox.
This week, Blockbuster announced that it plans to close as many as
960 stores by the end of next year in an effort to cut costs and become
more competitive. This number, according to a Wall Street Journal report,
is on top of the previous closings the company announced that could reduce
its total store count by up to 40 percent. At the same time, the company
continues to push ahead with placement of its Blockbuster Express kiosk
“We’ve been described as a melting iceberg, but we’re no longer melting,” Jim
Keyes, chief executive of Blockbuster, told The Dallas Morning News. “We
have an opportunity to improve our availability to the customer. With 2,500
kiosks opening this year and a total of 10,000 by next year, we’re not
As a point of comparison, Redbox currently operates over 14,000 video
rental kiosks in the U.S.
The latest stores Blockbuster plans to close are among the 18 percent
it says are unprofitable. Another 35 percent are said to be performing
very well while 47 percent are profitable but not to the same degree as
its core stores.
Discussion Questions: What is your reaction to Blockbuster closing stores
and opening kiosks in response to market conditions? Are the changes Blockbuster
is making ahead, in line or behind
the curve in the rapidly changing DVD and video-game rental business?
- Blockbuster may close 960 stores by end of next year – The Dallas
- Blockbuster to Shutter More Stores – The Wall Street Journal