CNet’s gadget blog is predicting that video rental giant Blockbuster is going under…and soon.
Apparently massive layoffs are in store, as revenue slipped nearly 6% in the third quarter, stock prices are down to a $5.06, and 526 stores have been closed in the last year. Plus, Netflix has put a major dent in business…a fact Blockbuster honchos can no longer deny.
Chairman Jim Keyes has even admitted that the focus on Netflix has damaged the company, despite Blockbuster’s own attempt at a mail-in subscription services at an even lower price.
Fresh off speculation that Blockbuster could be closing up shop soon, the movie rental company is cutting back on their Netflix-competing Total Access plan.
The big draw of the Total Access plan was the ability to also get an unlimited amount of in-store rentals and return mailed movies to stores.
However, this ended up costing Blockbuster a lot of money and they are now scaling back their Total Access allowances after being whupped by Netflix.
To get unlimited in-store returns, customers will now have to pay $7 more a month. In addition, advertising for the plan on TV and in-store has been cut in half.
Overall, Blockbuster is hemorrhaging money and we think it could completely die out in a few years. They were late to the game on mailed rentals and now they're in trouble on the digital distribution front.
I wonder if block buster is going under because of it's rent prices are being to high!
