Just when many of us thought Blockbuster
Blockbuster's latest competitive jab at Netflix
An analyst upgraded Blockbuster today, which seems to explain the stock's sizable jump. I personally think investors who are buying into this are ... well ... short-term thinkers at best, and at worst ... well, lemmings careening off a cliff comes to mind. Blockbuster continues to mock the idea of profitable strategies as it engages in a no-holds-barred arms race. This is a debt-laden company that is choosing - no, insisting -- on further money loss. Are memories so short that some investors have forgotten last quarter, which made it obvious that Total Access' excesses are a money-losing proposition for Blockbuster?
I dug around Blockbuster's site, and it reminded me why Netflix did well to begin with -- Netflix formed an innovative, customer-centric strategy, while Blockbuster was resting on its laurels (and yesterday's model). As far as I could tell, Blockbuster has now shamelessly copied its most formidable rival with the look and feel of its online rental site, which doesn't exactly give it any points for ingenuity. (Interesting, too, are a few facts that Netflix notes on its site: More than 90% of Netflix subscribers describe themselves as so satisfied they recommend the service to others; every three months, Netflix subscribers rent more than 95% of Netflix's 80,000 titles; and a timely reminder I've long suspected, Netflix is actually an environmentally friendly option, given the fact that it doesn't involve extra car trips to stores.)
Regardless of how the short term might sound precarious for Netflix -- more shudders emanated from renewed rumors Apple
For related Foolishness, put the following articles in your queue:
- Is Apple about to make a Blockbuster move?
- Last quarter implied there's just too much Total Access at Blockbuster.
- Does Netflix belong in your portfolio? Fools duel it out.
Netflix is a Motley Fool Stock Advisor pick -- several times over. To find out what other companies David and Tom Gardner have recommended to subscribers, take a 30-day free test-drive.
Alyce Lomax does not own shares of any of the companies mentioned.