Blockbuster finishes the decade with a whimper

For a former video-store giant, not such a blockbuster decade

In June 2008, Blockbuster went to Comic-Con International armed with kiosks from which users could download movies to Archos media players—problem was, no one had (or has) an Archos media player. (Keyes says now he would have preferred to have gone with Microsoft or Sony, but they had no interest.)  Then came the On Demand set-top box in December '08, which people didn't like...or need. (Keyes says now that "people just didn't want another set-top box or remote.") That morphed into the July 2009 announcement that Samsung's online-enabled plasma and LCD TVs, and Blu-ray players, would allow for pay-per-view streaming of Blockbuster-provided content, which didn't thrill analysts who saw it as the same-ol' same-ol' (more streaming content...yawn). And then, most recently, was the SD-card kiosk—which, as it turns out, spits out movies that won't play in most devices that use SD cards without a $50 adapter you have to buy at the store. But, hey, the SD card is free!

Keyes insists that those products were just experiments, a sneak peek into a possible future for which consumers, and maybe Blockbuster itself, are not yet ready. "We're way ahead of our headlights when it comes to the technology," he says, acknowledging that perhaps press-release hype sent the wrong signals, that's all. "We're losing the PR battle." Sooner or later, he maintains, the company will hit upon the strategy that aligns with Keyes's goal of "anywhere, any time, any movie." At which point, he hopes, Blockbuster stops being a punch line and becomes, after years in Wall Street's wasteland, profitable again.

To use yet another analogy: Blockbuster, Keyes says, "is a football team that's rebuilding. At first, the press is all over you. They're gonna hammer you, tell you you're dead, you'll never be as good as you were. Meanwhile, you're slowly building positions with strong players, and in three years you've got a winning team. It's hard to get pats on the back when you're posting the real financial results that come with a transition."

There are signs Blockbuster's competitors are also having issues: Redbox is raising its prices in some areas from 99 cents to $2 a rental, and Netflix is attempting to make the inevitable—and necessary—leap into online streaming. Because, really, how long till DVDs go the way the way of the CD? With the landscape shifting drastically under its franchise foundations, Blockbuster is sure spending a whole lot of time just proving it's a going concern.

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