Pity James Keyes. The Blockbuster chairman and CEO has been battling rumors of the struggling movie rental chain's impending bankruptcy since he took control of the company three years ago.
And the bad news keeps piling up. Struggling under the weight of some $975 million in debt, more than 1,000 underperforming stores have been shuttered over the past year.
Keyes, who previously was head of convenience store chain 7-Eleven, insists things aren't as bleak as the picture the media is painting.
He points out that the chain is transitioning into other distribution platforms by expanding its video-on-demand options, offering movie rentals on cellphones and breaking into the kiosk business long dominated by rival Redbox.
Further, he argues that the good relationships Blockbuster maintains with studios and the attractive price points it offers on DVD sales and rentals will be critical to its survival.
Giving credence to Blockbuster's status as Hollywood's preferred brand, Sony and 20th Century Fox announced on Wednesday that they would allow the chain to rent its movies the same day they go on sale.
Along with a similar pact with Warner Bros., this gives the chain a 28-day leg up on Redbox and Netflix in offering new releases such as "Avatar" and "The Blind Side."
Is this the longest funeral in history?
No, not at all. It's been an interesting experience to see this momentum build. There's been a lot of negative momentum built around the perception that Blockbuster is a video store, and as such is symbolic of a channel that is in severe decline. That's frustrating because we've spent the last several years building this brand into a multichannel provider of entertainment. In terms of our plans to compete in the digital space, we have nowhere to go but up.
What does the deal with Sony and Fox signal about your relationship with studios?
The deals with these two studios, in addition to the one we previously announced with Warner, happened because of what we offer studios. What's been missed in the focus on Netflix and Redbox is that these are single-channel services, and they're not consistent with the studios' goals.
Because of the subscription nature of the business, making 400 million copies of "Avatar" available in bulk doesn't make sense for studios because they're losing money on each transaction. It's like offering an all-you-can-eat buffet when you have the best steak available.
We provide a special link in the distribution chain of home entertainment by introducing our customers to hundreds of movies that aren't box office hits or never find their way to theaters, in addition to movies like "Precious" or "Avatar."
Through our new program Blockbuster Premieres, we're partnering with producers to launch new movies that are really good but may not have had a theatrical release. We're allowing them to share that wall space in our Blockbuster stores.
That's leveraging our strength, and that's good for studios because we are introducing customers to high-quality films.
