3. Company Background
Founded in 1985 by David Cook
• Publicly traded after 1986 under the name Blockbuster
Entertainment
Acquired by Viacom in 1993 at a $8.4 billion price tag
• Split from Viacom and has since been known as
Blockbuster, Inc. 2004
Currently under the management of CEO Jim Keyes and 4
prominent executive VPs
4. Industry
Video Rental Market
• Traditional brick and mortar dominated by Blockbuster
• By-mail service revolutionized by Netflix
• Distinct competitive advantages
• Focus on convenience and low cost
Lack of Growth in Physical Film Market
• Segment contains In-store, Vending, Mail subscription
• Vending has grown, but only represents 3.3% of
Industry revenue
2%
5. Industry
Shift to Digital Media
• Cable and satellite video-on-demand
• Internet downloadable content
• Streaming video
19%
14. Structure James W. Keyes
Chairman of the
Board & CEO
Regional
Manager
Store
Manger 1
Store
Manger 2
Regional
Manager
Store
Manger 3
Store
Manger 4
Regional
Manager
Store
Manager 5
Store
Manger 6
Eric H. Peterson
Executive VP/General
Counsel and Secretary
Thomas M. Casey
Executive VP & CFO
Kevin Lewis
Senior VP, Digital
Entertainment
Jeffery Calman
VP of New Media and
Studio Relations
18. Recommendations
Allow leases to expire on poor performing stores
• 6% Store closure rate in 2008 has not significantly
affected store sales
Restructure into Matrix style
• New partnership with Sonic Solutions
Increase retail merchandise at remaining stores
• 4th quarter non-movie sales 36.5%
19. Recommendations
Video Game Industry
• 19% growth in 2007
Operating Plan
• Leveraging Sonic Solutions technologies
to create direct-to-console game rentals
Marketing Plan
• Incorporate into Total Access offering
Direct Video Game Downloads
20. Recommendations
Benefits for
• Blockbuster’s strong supplier relationship
• Improved variety of films
Benefits of
• Leverage existing infrastructure
• Reduce need for capital expenditure
Advantage over Netflix
• First-Mover advantage
On-Demand Blockbuster Channel
21. Risks
• Projects in Growth stage Uncertainty
• Competition Potential loss of first mover advantage
• Debt to Equity Ratio
• Lack of funding Liquidate & Close
Blockbuster reported that its full-year domestic same-store sales rose 6.4 percent, a sharp turnaround from the 6.9 percent decline reported a year ago. The results included a 1.2 percent rise in rentals and a 37.4 percent jump in retail comparables.
Blockbuster reported that its full-year domestic same-store sales rose 6.4 percent, a sharp turnaround from the 6.9 percent decline reported a year ago. The results included a 1.2 percent rise in rentals and a 37.4 percent jump in retail comparables.
Subscription based Blockbuster On-Demand channel
Similar look and feel as Blockbuster.com
Subscription based Blockbuster On-Demand channel
Similar look and feel as Blockbuster.com