Say goodbye to Blockbuster
- Thread starter Jagi
- Start date
updated 6:27 p.m. CT, Tues., July. 24, 2007
SAN FRANCISCO - Netflix Inc. frustrated investors and customers alike Tuesday as its stock price plunged to its lowest point in more than two years while its Web site was inaccessible most of the day because of unexplained technical problems.
The 7 percent drop in Netflix’s shares wasn’t a shock after the Los Gatos-based company reported the first quarterly customer losses in its history and dimmed its earnings outlook for the rest of the year.
But the Web site outage was a surprising — and embarrassing — setback.
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The online hub of Netflix’s rental system went down Monday evening and remained unavailable until Tuesday afternoon, locking out subscribers for more than 18 hours. Spokesman Steve Swasey attributed the outage to an unanticipated problem that he declined to describe.
The breakdown didn’t appear to be related to San Francisco power outages that were blamed for temporarily knocking out several popular Web sites, including Craigslist, Technorati, Typepad and Livejournal.
Service to Netflix’s site was finally restored around 3 p.m. PDT after Netflix’s engineers had missed several earlier estimated times for fixing the trouble.
Netflix had been in the process of updating its computers to reflect price reductions that took effect Tuesday.
Netflix was the 74th most visited Web site in the United States during the week July 21, according to the research firm Hitwise. It accounted for about 12 percent of all U.S. online traffic to movie and entertainment sites, ranking behind only Amazon.com Inc.’s IMDb.com.
The timing of the breakdown was especially awkward because it occurred shortly after Netflix management had briefed industry analysts on plans to improve its customer service in an increasingly bitter battle with rival Blockbuster Inc.
Lowering prices will erode Netflix’s profit — a sacrifice that the company is making in an attempt to regain market share from Blockbuster. The decision led to a further drubbing of Netflix’s already battered stock, which has plummeted by 38 percent this year.
The shares dropped as low as $15.62 early Tuesday, their lowest point since June 2005. The stock later rebounded, but still finished down $1.20 at $16.07.
Hoping to retain more of its current customers while enticing new subscribers, Netflix is decreasing monthly fees by $1 on its two most popular plans to match Blockbuster’s prices for comparable Internet-only services.
Netflix has been having trouble signing up subscribers since late last year, when Blockbuster began giving its online customers the option of swapping DVDs at one of its stores instead of relying on the mail and waiting at least two days for another movie.
“We are in a very competitive, large battle,” Reed Hastings, Netflix’s chief executive, said in an interview Monday after the company released its second-quarter earnings. “But we feel like we are still in a great position.”
Wedbush Morgan Securities analyst Michael Pachter believes Blockbuster may have exposed Netflix’s Achilles’ heel by aggressively promoting the convenience of Blockbuster stores to build its online service.
“Netflix has a broken model,” Pachter said. “They aren’t used to competition and now someone is competing against them very effectively.”
Netflix ended June with 6.74 million subscribers, a decrease of 55,000 customers from April. It marked the first time Netflix’s total subscribers have declined from one quarter to the next since the service began renting DVDs through its Web site in 1999.
Blockbuster is expected to update its online subscriber count Thursday when it releases second-quarter results. The Dallas-based company ended March with 3 million subscribers after outstripping Netflix’s customer growth for two consecutive quarters.
The gains haven’t helped Blockbuster financially. The company lost $49 million in the first quarter. Blockbuster last month indicated it might try to reverse that trend by raising the prices of its online service. If that happens, Netflix’s earnings during the second half of this year might not shrink as much as management currently expects.
Assuming Blockbuster holds steady, Netflix expects its performance during the second half of the year to lag 2006’s pace. Management expects Netflix’s full-year profit to range from $42.4 million to $52.4 million, down from an April forecast of $55 million to $60 million. Netflix earned $35.4 million through the first half of this year.
SAN FRANCISCO - Netflix Inc. frustrated investors and customers alike Tuesday as its stock price plunged to its lowest point in more than two years while its Web site was inaccessible most of the day because of unexplained technical problems.
The 7 percent drop in Netflix’s shares wasn’t a shock after the Los Gatos-based company reported the first quarterly customer losses in its history and dimmed its earnings outlook for the rest of the year.
But the Web site outage was a surprising — and embarrassing — setback.
Story continues below ↓advertisement
The online hub of Netflix’s rental system went down Monday evening and remained unavailable until Tuesday afternoon, locking out subscribers for more than 18 hours. Spokesman Steve Swasey attributed the outage to an unanticipated problem that he declined to describe.
The breakdown didn’t appear to be related to San Francisco power outages that were blamed for temporarily knocking out several popular Web sites, including Craigslist, Technorati, Typepad and Livejournal.
Service to Netflix’s site was finally restored around 3 p.m. PDT after Netflix’s engineers had missed several earlier estimated times for fixing the trouble.
Netflix had been in the process of updating its computers to reflect price reductions that took effect Tuesday.
Netflix was the 74th most visited Web site in the United States during the week July 21, according to the research firm Hitwise. It accounted for about 12 percent of all U.S. online traffic to movie and entertainment sites, ranking behind only Amazon.com Inc.’s IMDb.com.
The timing of the breakdown was especially awkward because it occurred shortly after Netflix management had briefed industry analysts on plans to improve its customer service in an increasingly bitter battle with rival Blockbuster Inc.
Lowering prices will erode Netflix’s profit — a sacrifice that the company is making in an attempt to regain market share from Blockbuster. The decision led to a further drubbing of Netflix’s already battered stock, which has plummeted by 38 percent this year.
The shares dropped as low as $15.62 early Tuesday, their lowest point since June 2005. The stock later rebounded, but still finished down $1.20 at $16.07.
Hoping to retain more of its current customers while enticing new subscribers, Netflix is decreasing monthly fees by $1 on its two most popular plans to match Blockbuster’s prices for comparable Internet-only services.
Netflix has been having trouble signing up subscribers since late last year, when Blockbuster began giving its online customers the option of swapping DVDs at one of its stores instead of relying on the mail and waiting at least two days for another movie.
“We are in a very competitive, large battle,” Reed Hastings, Netflix’s chief executive, said in an interview Monday after the company released its second-quarter earnings. “But we feel like we are still in a great position.”
Wedbush Morgan Securities analyst Michael Pachter believes Blockbuster may have exposed Netflix’s Achilles’ heel by aggressively promoting the convenience of Blockbuster stores to build its online service.
“Netflix has a broken model,” Pachter said. “They aren’t used to competition and now someone is competing against them very effectively.”
Netflix ended June with 6.74 million subscribers, a decrease of 55,000 customers from April. It marked the first time Netflix’s total subscribers have declined from one quarter to the next since the service began renting DVDs through its Web site in 1999.
Blockbuster is expected to update its online subscriber count Thursday when it releases second-quarter results. The Dallas-based company ended March with 3 million subscribers after outstripping Netflix’s customer growth for two consecutive quarters.
The gains haven’t helped Blockbuster financially. The company lost $49 million in the first quarter. Blockbuster last month indicated it might try to reverse that trend by raising the prices of its online service. If that happens, Netflix’s earnings during the second half of this year might not shrink as much as management currently expects.
Assuming Blockbuster holds steady, Netflix expects its performance during the second half of the year to lag 2006’s pace. Management expects Netflix’s full-year profit to range from $42.4 million to $52.4 million, down from an April forecast of $55 million to $60 million. Netflix earned $35.4 million through the first half of this year.
Why the hell would I do that, when I have access to the INTERNET?
(and more importantly, BGOL?)
Ouch. I didn't know about the 526 stores.
I have a Blockbuster 2 blocks away that I pass by on foot about 4 times a week (often en route to work). I currently have 6 FREE NEW RELEASE coupons there (they're good for a year; expiring June 1st, 2008). I need to use them shits up. Been putting it off for ages. I've used about 40 free coupons over the years at that spot. It's the ONLY video store in our fucking area, lol. How shitty is that, huh? No mom and pops shops. Just a few Chinese and Japanese-based stores in that I live in a predominantly Asian/Italian district.
move to japan and you can get that, a PS3 and school girl panties, all from the same vending machine. Hell in 2 years from now, I wouldnt be surprised if they start selling midgets in one. The japanese are ADDICTED to vending machines.
* follows YoungSinisters lead!!*
Damn shame. *Grabs new 500GB Hard Drive, Download Manager, Rapidshare Premium Account, Blank DVDs and follows*
yessir..ma'am
I still have Blockbuster Online Total Rewards at the original introductory price. It's much more expensive and much more restrictive for new subscribers. The second they try to change the terms of my membership, I'm going to dump their service and reactivate my Netflix account. However, as long as I can turn in every movie that I get through the mail for another free movie in the store, we're cool.
The end for me was when I was 30 min late returning a vid and was charged another week rental. Had they not tried to charge me I would have continued to spend money there. Their loss.
Damn! Even the uninitiated realize that Blunt is full of shit. Bruh, your next move is to reach up there and hit that Ignore button and place that hata on ignore like 75% of the peeps on BGOL do
This message is hidden because Blunt is on your ignore list.
Uppage for all the heads in that we've all dealt with a combination of Blockbuster, mom & pops shops, bootlegs on the street, Netflix and variations of same, and of course the ol' trusty online downloading 
mutha fuck blockbuster i wish they would have went under a few years ago, them bitches tried 2 fuck my shit up for 6 dollars of late fees, i think thats what did them in,when they start sendin the police 2 people houses for a fuckin dvd that u can buy for less than 10 dollars, blockbuster can eat a dick
Props to MITB on December 21st, 2007:
• Blockbuster plans to raise prices of its DVD-by-mail service
• Blockbuster plans to raise prices of its DVD-by-mail service
Blockbuster raising prices for service
By DAVID KOENIG, AP Business Writer
Fri Dec 21, 1:29 AM ET
DALLAS - Blockbuster Inc., which has been losing money on online movie orders, is boosting prices of its DVD-by-mail service for new customers and some existing ones by up to 40 percent.
The movie-rental giant began notifying customers of the increases — and some price cuts — early Thursday. The hikes of $2 to $10 will take effect next week and caused an immediate buzz on Internet boards.
The immediate beneficiary of the move was rival Netflix Inc. — its shares jumped more than 9 percent. Blockbuster shares barely budged.
Blockbuster declined to say how many of its 3.1 million online subscribers are facing rate increases.
Spokeswoman Karen Raskopf also declined to disclose which current customers will see price hikes other than saying, "We are taking into account the profitability of individual subscribers."
Blockbuster lost half a million online customers in the July-September quarter. Chief Executive James W. Keyes said last month that many of those subscribers were costing his company more than they were worth.
The company spent heavily to advertise the online service, and it lost money when customers took their movies back to stores for free exchanges.
While Blockbuster was losing online customers over the summer — and said it would stop reporting the number of subscribers — Netflix cut prices and added 286,000 subscribers, pushing it over the 7-million mark.
Netflix pioneered the online ordering and mail delivery of rental movies in 1999. Blockbuster followed in 2004, and cut into Netflix's lead during late 2006 and early 2007.
Blockbuster offers several plans for subscribers who order movies online and receive them in the mail. The most popular plan lets customers keep three DVDs at any time and exchange up to five DVDs per month at a local Blockbuster store for a free rental.
That plan will rise from $17.99 to $19.99 per month for new customers and some existing ones beginning Dec. 27, the company said.
The top-of-the-line plan, in which customers can keep three DVDs out and get unlimited free in-store exchanges, will go from $24.99 to $34.99 per month, a 40 percent increase.
A basic plan that lets subscribers keep one DVD but doesn't entitle them to free in-store exchanges will drop from $4.99 to $3.99 per month.
Spokeswoman Raskopf called the plans "a really good value for consumers" that must be balanced against "providing a fair return to Blockbuster." She said the Dallas company hopes the increases won't cause existing subscribers to quit.
"This is not a plan to drive people away," she said. "We want to keep them all."
A spokesman for Netflix said the Los Gatos, Calif.-based company doesn't plan to change its standard pricing but continues to test different rates.
"The greatest convenience, selection and value continues to be with Netflix," said the spokesman, Steve Swasey.
Blockbuster shares rose 5 cents, to $3.55, in trading Thursday, while Netflix shares gained $2.37, or 9.5 percent, to $27.24.
___
AP Business Writer Michael Liedtke in San Francisco contributed to this report.
Good riddins..... I felt too black for that chain.
Credit card my ass!!
I can't believe you said that. SAD....
Quick question - does your local Blockbuster still offer that deal from a year ago with regular dvd rental HASSLE FREE RETURNING (where they give you an extra week leeway)?
They were advertising the hell out of that in 2006 ... but it's quieted drastically in 2007. I never see it advertised on tv anymore, they don't have the ads splashed all over their store window (just a "$1 credit" if you return a 2-day new release after 1 day). I noticed on the back of a receipt (free movie coupon rental a week ago) it mentioned the grace period of 7 days was still in effect.I knew that shit probably wouldn't work well for them as most people don't plan on returning 1/2-day rentals on time if they've got an extra week
They were advertising the hell out of that in 2006 ... but it's quieted drastically in 2007. I never see it advertised on tv anymore, they don't have the ads splashed all over their store window (just a "$1 credit" if you return a 2-day new release after 1 day). I noticed on the back of a receipt (free movie coupon rental a week ago) it mentioned the grace period of 7 days was still in effect.I knew that shit probably wouldn't work well for them as most people don't plan on returning 1/2-day rentals on time if they've got an extra week
sme here, all the fees they hit me with i could have bought the movie, dont they edit their movies too?The end for me was when I was 30 min late returning a vid and was charged another week rental. Had they not tried to charge me I would have continued to spend money there. Their loss.
i'll stop you right there, aint no local blockbuster in my area any more, a 99 cent store took its place.. the nearest one is a bit of a distance for me i'd rather just keep downloading or go back to netflix, which by the way i canceled netflix once bgol had a steady flow of downloadable movies
I have been to Blockbuster since I bought my PS3....for me it's all about Blu Ray's...the one Blockbuster that rent them in my area is a country mile drive...that aint gonna happen.
They should have embraced the way tech is going instead of sitting on their high horse like it wasn't going to affect them.
Fuck'em.
They should have embraced the way tech is going instead of sitting on their high horse like it wasn't going to affect them.
Fuck'em.
I haven't paid for a rental there on my own in years.
Our Blockbuster is a 2-min' walk from home.
I just use free coupons (seen about 30 in the past few years) from http://www.airmiles.ca & from cereal boxes' promotional offers.
Rent 'em when they're paid for by work.
I haven't dealt with Blockbuster Online or Netflix, and I'm not sure if I ever will. I just watch streaming/downloadable at all the TV/MOVIE websites, upload storage spots, and the almight BGIZZLE.
can you post some of those tv/movie streaming websites? is there a thread with just that info?
would be cool if i could those sites could work on the ps3's browser
Word. Why they hell would I pay for something I can get for free? Cats kill me with that all the time....
its a guess but i think it has to do with nintendo's stance.
its for some companies attracting the dollars of the family friendly consumer that are turned away from porn, illegal sharing, downloading instead of hard copy purchasing and renting.
i never did like blockbuster, i ended up just buying anything i really wanted to see...
also explains why blockbuster locations have been closing in cleveland....one of the few places i never thought i'd see close down...
also explains why blockbuster locations have been closing in cleveland....one of the few places i never thought i'd see close down...
What are the best sites to watch movies, tv shows, etc? The free ones please...thanks in advance.
I was really feeling their online program. There was a BB right down the street from my crib about a mile away. I used my que for series like 24 and The Shield and trade those in for new releases that I missed in the theater. I kept Netflix just for anime.But then BB fucked up and jacked the price AND dropped the unlimited in stores
So I dumped them and just use NF now. Im not much on d/l movies I would rather watch them on my TV and watch the DVD extra features.
Oh well
So I dumped them and just use NF now. Im not much on d/l movies I would rather watch them on my TV and watch the DVD extra features.
Oh well
I'm on like my 5 FREE MONTHLY TRIAL with Blockbuster so I could care less if they raise their prices or not
I was really feeling their online program. There was a BB right down the street from my crib about a mile away. I used my que for series like 24 and The Shield and trade those in for new releases that I missed in the theater. I kept Netflix just for anime.But then BB fucked up and jacked the price AND dropped the unlimited in stores
So I dumped them and just use NF now. Im not much on d/l movies I would rather watch them on my TV and watch the DVD extra features.
Oh well
yeah features are key, one thing that is usually missing from downloads
dope avatar by the way
Damn he might be right. I just got an Email from blockbuster telling me I would have to pay $11 more a month for my account.
the local hustle man ruined them