Good news for people who hate bad movies: Blockbuster says consumers aren't happily lapping up this year's new releases, because they're weaker in quality than the year before.
In a conference call to analysts, Blockbuster CEO Jim Keyes said same store rental sales have dropped significantly this year, and the movies themselves are to blame, Video Business reports. This goes against the conventional wisdom that consumers are simply holding off on purchases because of the recession.
While Keyes' claim should please people who haven't been happy with the recent slate of movies, it doesn't bode well for Blockbuster. The company is trying to reduce its debt by $100 million as part of a refinancing agreement that would extend its line of credit beyond an August due date. To accomplish this, the retail giant plans to cut costs.
Blockbuster will buy fewer DVDs from movie studios in the months ahead and will lobby for better revenue sharing. It will also expand its weekly and monthly rental rate options -- though the story doesn't specify how. Finally, the company said it wants more devices to be compatible with its digitally-delivered content. Could Playstation 3 streaming be on the way? The story doesn't provide further details.
Keyes also said in the conference call that standalone rental kiosks are in the "final stages" of testing and estimated that 12,000 kiosks will be up and running by the middle of 2010.
Blockbuster stock has struggled over the last year, and was made worse by a Bloomberg News report from January that suggested the compay was mulling bankruptcy. By contrast, mail-order competitor Netflix has seen profits.
