Blockbuster posts big fourth-quarter loss
Execs are hopeful that firm's retail model will stay relevantBlockbuster recorded a gigantic fourth-quarter loss after writing down the value of its assets, sinking its stock again, but executives expressed optimism Wednesday that the company's old-fashioned retail model can remain relevant.
Blockbuster has three things going for it: The drying up of retail competition from the ongoing closures of most Movie Gallery and Hollywood Video stores; major studios aren't making their new releases immediately available to Redbox; and Warner Bros. will begin a 28-delay before giving Netflix access to new-release DVDs.
As to the new WB-Netflix relationship, Blockbuster CEO Jim Keyes told analysts on Wednesday that he was "really anxious to see the impact." The first DVD releases affected are "The Blind Side" and "Sherlock Holmes."
Keyes said that if other studios followed the lead of Warner Bros. and delayed giving their new releases to Netflix, it could result in fewer store closures at Blockbuster. The company shut 374 U.S. stores last year and could shutter as many as 545 more this year.
Blockbuster lost $435 million in the fourth quarter, compared with $360 million in red ink in the year-ago frame. Revenue dropped 18% to $1.1 billion.
Shares of Blockbuster fell 4% to 36 cents during regular trading, then dropped another 12% after the closing bell, when its results were released.
Blockbuster also said it was exploring ways to recapitalize its $1 billion debt and to boost its shares out of penny-stock status.