I read an article that will interest those tanning salons that also offer video rentals. It basically stated that despite Blockbuster Video’s contractual advantages regarding new releases, the company’s lack of cash flow prevents it from properly marketing its differentiating factor.
Considering the once-king of the video industry is paying down $1 billion in debt, it’s unlikely that consumers will receive a costly barrage of advertising messages anytime soon.
Ironically, Blockbuster’s 28-day advance receipt of Warner Brothers, Fox and Universal films (as compared to the general release date) has been one of the few selling points that boost it above the bustling business models of Redbox and Netflix. Only some movie titles are affected, though, as the playing field is level when it comes to new releases from other studios (Sony, Paramount, Disney, etc.). In all actuality, Blockbuster takes a hit there, as its higher prices can’t compete with machines and mail order. Tanning salons with video are typically priced somewhere in between.
There’ve been murmurings in the press that Blockbuster may declare bankruptcy; however, there’s not much speculation on how that would impact the company’s marketing efforts or overall business. It’s unlikely that advertising will become an investment priority now or in the event of Chapter 11.
Year-over-year, Redbox and Netflix continue to expand in terms of revenue, subscribers and company expansion. Blockbuster, on the other hand, has shown steady declines.
Source:
Advertising Age: Now Playing at Blockbuster: Catch 22
