Krell
March 10th, 2006, 07:42 PM
By Gina Keating
LOS ANGELES (Reuters) - Blockbuster Inc.
Chief Executive John Antioco on Thursday said the No. 1 video rental chain has a digital future that may take it to a greater size than it achieved as a primarily store-based business.
Blockbuster emerged leaner and more focused from a battering in 2005 that saw the company wracked with debt and shareholder pressure to boost the stock price while facing intense competition from rival Netflix Inc. and an industry-wide drop in same-store rental revenue.
The company's fourth-quarter profit on Thursday beat Wall Street forecasts, and Antioco said that Blockbuster was poised to leave "the perfect storm of 2005" behind and grow.
While optimists say a downturn in store-based rental revenues may reverse or level off, Antioco said Blockbuster plans to take market share as rival chains like Movie Gallery Inc. close stores.
Even so, Blockbuster's biggest growth opportunity will be in online rentals and, eventually, digital delivery of content, he said.
After a bruising 2005 price war in which Blockbuster and Netflix spent some $300 million on marketing, the online industry has settled into a two-horse race, he said.
"I don't think our attitude is peaceful co-existence," Antioco said. "We want as many subscribers as we can get and we are going to be aggressive in getting as many subs as we can."
By 2010, industry projections show online rental growing to 20 million households from about 5 million last year as in-store rental revenue falls to $5 billion from $7 billion in 2005, he said.
"We clearly could have a bigger business overall than we do today," Antioco said, adding that the company is shooting for a larger portion of in-store rental as its rivals, such as Movie Gallery, weaken and close stores.
As an investor in online download service CinemaNow, Blockbuster also is well-positioned when the digital transition happens, Antioco said.
"The challenge with downloading is there isn't a profitable business model that exists. We are very interested in the space," he said. "If digital delivery is out there we ought to be playing a role in it. If we aren't, then something's wrong."
YOU ARE HERE: Home > News > Technology & Science > Technology >Article (http://today.reuters.com/news/newsarticle.aspx?type=technologyNews&storyid=2006-03-10T030624Z_01_N0960561_RTRUKOC_0_US-RETAIL-BLOCKBUSTER-CEO.xml)
*note - this is not an S&T article for ZP, belongs under Digital News or P2P*
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.
LOS ANGELES (Reuters) - Blockbuster Inc.
Chief Executive John Antioco on Thursday said the No. 1 video rental chain has a digital future that may take it to a greater size than it achieved as a primarily store-based business.
Blockbuster emerged leaner and more focused from a battering in 2005 that saw the company wracked with debt and shareholder pressure to boost the stock price while facing intense competition from rival Netflix Inc. and an industry-wide drop in same-store rental revenue.
The company's fourth-quarter profit on Thursday beat Wall Street forecasts, and Antioco said that Blockbuster was poised to leave "the perfect storm of 2005" behind and grow.
While optimists say a downturn in store-based rental revenues may reverse or level off, Antioco said Blockbuster plans to take market share as rival chains like Movie Gallery Inc. close stores.
Even so, Blockbuster's biggest growth opportunity will be in online rentals and, eventually, digital delivery of content, he said.
After a bruising 2005 price war in which Blockbuster and Netflix spent some $300 million on marketing, the online industry has settled into a two-horse race, he said.
"I don't think our attitude is peaceful co-existence," Antioco said. "We want as many subscribers as we can get and we are going to be aggressive in getting as many subs as we can."
By 2010, industry projections show online rental growing to 20 million households from about 5 million last year as in-store rental revenue falls to $5 billion from $7 billion in 2005, he said.
"We clearly could have a bigger business overall than we do today," Antioco said, adding that the company is shooting for a larger portion of in-store rental as its rivals, such as Movie Gallery, weaken and close stores.
As an investor in online download service CinemaNow, Blockbuster also is well-positioned when the digital transition happens, Antioco said.
"The challenge with downloading is there isn't a profitable business model that exists. We are very interested in the space," he said. "If digital delivery is out there we ought to be playing a role in it. If we aren't, then something's wrong."
YOU ARE HERE: Home > News > Technology & Science > Technology >Article (http://today.reuters.com/news/newsarticle.aspx?type=technologyNews&storyid=2006-03-10T030624Z_01_N0960561_RTRUKOC_0_US-RETAIL-BLOCKBUSTER-CEO.xml)
*note - this is not an S&T article for ZP, belongs under Digital News or P2P*
Yah something is wrong, very very wrong, now hire me and make it right.
.