We don't necessarily want to break into applause when losses narrow.
A smaller Blockbuster isn't necessarily a better one. The company can point to store-level trends like DVD rentals increasing domestically, and strong merchandise sales overseas, but at the end of the day, worldwide comps still fell for both rental and merchandise revenue.
New tweaks like its Total Access model are bold, but not necessarily brilliant. The move refashions its Internet-powered mail-delivered rental business to drive customers into its stores. But the generous terms may find it cannibalizing its in-store rentals while attracting the hyperactive renters that rival Netflix
Still, even in cyberspace, it's been pretty hard for Blockbuster. So far in 2006, the company's Blockbuster Online base has grown from 1.2 million to 1.5 million members. Over at Netflix, the subscriber count has gone from 4.2 million to 5.7 million over the same nine months. Blockbuster isn't going to gain any kind of traction if Netflix lands five new subs for every single warm body Blockbuster attracts.
With companies like Amazon.com
That said, there are still some glimmers of hope here. Free cash flow has actually clocked in positive so far in 2006. The company has been able to trim down its sizable debt. And if Total Access works as planned -- and not how I fear it might -- there should be a lot of in-store foot traffic, and the company has as good a shot as any to work some upsell magic.
I remain skeptical, yet even if I won't necessarily applaud a narrower deficit, I will applaud the company's ability to think outside the rental box. It will not go quietly into the Blockbuster night.
For more on changes in the movie-rental industry:
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