I’m Seeing Red11 Mar, 2009 By: Stephanie Prange
In all the analyst hoopla over Blockbuster possibly filing Chapter 11 and the ensuing, wrong-headed declarations of the end of packaged media, I’m seeing red in more ways than one.
First of all Blockbuster will be around even if it files bankruptcy. Its problem isn’t cash flow but a mountain of debt that has plagued it since Viacom spun it off.
Second, disc rental is NOT DYING. While analysts have gone ga-ga over Netflix because of its streaming option, the company’s CFO a few weeks ago was careful to note that disc rentals are key to the company’s successful offering.
Third, I’m seeing another kind of red that analysts are conveniently forgetting: Redbox. It seems to be doing just fine. This past weekend I found myself selling Girl Scout cookies at the local Albertson’s supermarket (Please buy Girl Scout cookies by the way as the organization is feeling the recession and part of the proceeds go directly to the troop.). As the cookies went out, I saw a lot of little red-packaged discs coming back in.
So, while Maggie Overfelt at CNNMoney in a March 6 story called Blockbuster “doomed” and wrote that mail-order DVDs and streaming online video “may kill off the entire industry,” I beg to differ because I am seeing red.