Blockbuster

Blockbuster/Circuit City: OK, I don't get it either

Sun Microsystems CEO Scott McNealy had a colorful assessment of the planned merger between Hewlett-Packard and Compaq: it's like two garbage trucks, he said, backing into each other in slow motion. (Beep, beep, beep...thunk.)

That brings me to Monday's rather stunning news that Blockbuster, the giant video chain that's seen better days, is trying to buy Circuit City, the giant consumer electronics retail chain that's also seen better days. The offer, which was made in February and is just now becoming public, is worth $6 to $8 per share--between $1 billion and $1.3 billion … Read more

Where Jeff tries to kill two-thirds of The 404 hosts

EPISODE 77

Danny Keith of Skateboards.com joins us to make fun of Blockbuster's proposed buyout of Circuit City. Then we'll talk about how Botox goes to the brain, and how a guy does the one thing you can't do in rugby. Plus, Jeff tells us about Comedy Central's Night of Too Many Stars.

Listen now: Download today's podcast

Blockbuster offers $1 billion for Circuit City

Video rental giant Blockbuster on Monday announced it has offered to purchase Circuit City Stores for $6 to $8 per share, or about $1 billion to $1.3 billion.

Blockbuster initially made the proposal on February 17, but says Circuit City has not provided the due diligence it needs to make a more definitive offer. On Monday, Blockbuster decided to go public. In a letter to Circuit City CEO Philip Schoonover, Blockbuster CEO Jim Keyes notes that the two companies have been discussing proposed tie-ups since December.

Blockbuster says the offer is intended to "capitalize on the growing … Read more

Blockbuster's pending acquisition of Circuit City is laughable

Reuters is reporting that Blockbuster has offered Circuit City between $1 billion to $1.3 billion to acquire the floundering electronics retailer. And now, all that's left for us to do is laugh.

According to Blockbuster, it made the offer in February, offering $6 to $8 per share. Amazingly, that offer represents a premium of 54 percent to 105 percent over Circuit City's current share price of about $3.90, but much lower than last year's high of about $21 per share.

Blockbuster's chief executive, Jim Keyes, believes the merger will create a new Blockbuster that will be "the most convenient source of media entertainment" and its focus would shift from online rentals where it lost miserably to Netflix and turn to a more appealing mix of in-store offerings and DVD sales.

Circuit City has yet to comment on the news, but if you ask me, this deal will be confirmed by the end of the week and the people running the floundering big box retailer will run for cover.

But perhaps what's most compelling about this news isn't that two companies with totally different business models will become one major corporation that offers everything, it's that one poorly run organization is acquiring another. How can that be good for anyone?… Read more

Buzz Out Loud 700: Merger-mania!

Yahoo and Microsoft bring Google, AOL, and News Corp. into the ring for a pretty awesome merger-mania that we sincerely hope involves the gratuitous use of Spandex. Sunday, Sunday, Sunday on Pay-per-view! That darned RSA conference continues to scare the sneezes out of us by demonstrating how taking down a national power grid is trivially easy. (Insert nervous giggle here.) We guess it's good to know? Listen now: Download today's podcast EPISODE 667

Yahoo-Microsoft buyout brawl, one-two punch with a swift comeback punch http://www.news.com/8301-10784_3-9916001-7.html http://www.news.com/8301-13953_3-9915835-80.html http://online.wsj.com/article/SB120776803032602423.html… Read more

Blockbuster considering set-top box for movie downloads

Trips to the video rental store may be a thing of the past sooner than thought.

Netflix and Blockbuster are already offering DVD rental service by mail. Amazon.com, Microsoft's Xbox Live, and Netflix deliver movies directly to the PC. TiVo, Vudu, and Apple TV--not to mention cable and satellite companies--are doing the same for TV sets. Local independent stores notwithstanding, the only major brick-and-mortar options left for renting discs are Hollywood Video/Movie Gallery, which is close to bankruptcy, and Blockbuster.

But The Hollywood Reporter says Blockbuster may be giving customers more reasons not to visit its stores. … Read more

Why Blockbuster brick-and-mortars will be gone in five years

Over the past few years, Blockbuster has been a victim to a changing environment in the movie rental industry that has seen a mass of people leave brick-and-mortars in favor of online services like Netflix.

No better evidence of this is shown than the comparison between the net income Netflix enjoyed in 2006 ($49 million) and the net loss Blockbuster incurred -- $588 million. Just one year later, Blockbuster was able to turn things around slightly and enjoyed a net income of $54 million, but in 2007, the company didn't have such great luck. According to its most recent filing (September 2007), Blockbuster incurred a loss of $35 million in just one quarter.

So what's really going on at this company? Unfortunately, it doesn't look like anything good. After examining Blockbuster's 10-Q filed in September and evaluating prior year annual reports to estimate the impact on its upcoming annual report sometime next month, it not only looks like this company is in dire straits, I would venture to say that all of its brick-and-mortars will soon be closed. In fact, I give it about five years.… Read more

Will Apple's rental service succeed?

Steve Jobs' keynote at this year's MacWorld included the announcement of four new products: the new MacBook Air, Time Capsule, an update to the iPhone and iPod Touch, and a revised Apple TV with movie rentals through both the Apple TV and the iTunes store. It's clear that Jobs is excited about the new offering and the studios are also quite pleased with the terms of the new service, but what about John and Jane Consumer?

At the new iTunes rental store, visitors can check out movies from all of the major Hollywood studios. For new releases, users are charged $3.99 and catalog rentals are $2.99. HD rentals were also introduced this week at $4.99, but are only available through Apple TV. Once downloaded the movies will remain accessible for 30 days, but will only stay active for a 24 hour period after pressing play.

In 1987, the Dead Kennedy's released an album titled " Give Me Convenience, or Give Me Death," and for those who live by that credo, the new iTunes service delivers hands down.… Read more

Say goodbye to Blockbuster

It looks like the bottom has finally fallen out of Blockbuster. After numerous failed attempts at attracting new customers, the company is finally spiraling out of control.

Sad as it is, the end is near for Blockbuster, and all that pressure it has been placing on Netflix will be lifted.

And in the end, Netflix will be left standing to fight another day.… Read more