Keyes to the Pity

Slurpees, Big Gulps, and beef jerky, oh my.

Blockbuster (NYSE: BBI  ) is making the right call today, installing former 7-Eleven CEO Jim Keyes as its new CEO. I can't emphasize that enough.

Blockbuster is a dinosaur. If it clings to its image as a place to swap physical movies on DVD and videotape, digital delivery and video on demand will continue to guide it on a downward spiral toward obsolescence.

Saving Blockbuster isn't about embracing the new ways we'll all soon consume filmed entertainment; the playing field will be level when that digital future rolls around. The chain's one chance to live -- and keep its creditors at bay -- lies in reinventing its store.

You couldn't ask for a better captain to navigate these rough seas than Keyes. During his five years at the helm of the world's leading convenience-store chain, 7-Eleven always posted positive quarterly comps.

That's huge. With Blockbuster's money-draining Total Access program driving increased foot traffic into its stores for free DVD swaps, the company needs to do a better job of monetizing that flow. Lining the path to the checkout register with overpriced candy, soda, and snacks is a rookie mistake.

Blockbuster needs exclusive merchandise and entertaining diversions to become a destination-driven retailer that actually works.

Subsidizing its Total Access losses can't simply be about taking on Netflix (Nasdaq: NFLX  ) . That's a road to heartbreak. Digital delivery will also find Blockbuster butting heads against companies like Apple (Nasdaq: AAPL  ) , (Nasdaq: AMZN  ) , and Comcast (Nasdaq: CMCSA  ) .

Blockbuster needs to become a retailer again. It needs to become the convenience-store leader in entertainment retailing. In that sense, how can you not like Keyes here -- even if it may ultimately be too late to save the company?

Tomorrow, I'll be back with a few ways to save Blockbuster. Until then, check out some of our interviews with Keyes when he ran 7-Eleven:

Netflix and are recommendations for Motley Fool Stock Advisor newsletter subscribers. Finding out why is just a 30-day free trial subscription away.

Longtime Fool contributor Rick Munarriz has been a Netflix subscriber -- and shareholder -- since 2002. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 530646, ~/Articles/ArticleHandler.aspx, 10/24/2016 3:40:13 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/4/2010 3:59 PM
BLOKA.DL $0.19 Up +0.01 +0.00%
Blockbuster, Inc. CAPS Rating: *
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
AMZN $818.99 Up +8.67 +1.07% CAPS Rating: ****
CMCSA $64.06 Down -0.29 -0.45%
Comcast CAPS Rating: ***
NFLX $127.50 Up +4.15 +3.36%
Netflix CAPS Rating: ***