Considering the recession and fickle consumer tastes, these are awfully difficult days to be a retailer. For video chain Blockbuster, already no stranger to tough times, it just keeps getting harder.
With the rise of competitors such as movie-mailer Netflix and Redbox, whose flick-dispensing machines can be found in grocery stores all over, Blockbuster is being forced to reset, saying it may close nearly 1,000 stores by the end of 2010 as its once-certain dominance continues to be threatened by rivals.
According to a regulatory filing Tuesday, Blockbuster expects to shut between 810 and 960 locations by the time next year wraps up, a number that would exceed more than one-fifth of its current U.S. shops.
That's quite a step up, or back depending on your perspective, from Blockbuster's previous plan, which anticipated 380 to 425 closings in that time frame. Here's how the corporate office see it: Blockbuster characterizes 35% of its stores as "core," while saying 47%, or nearly half its total, are profitable, but still "non-core." The remaining 18% aren't turning a profit.
Ugh. That about sums it up at this point. Earlier this year, there were worries that Dallas-based Blockbuster might have to consider bankruptcy before it diffused that crisis. How about 2008, though? Another close call. Back then, it looked at a merger with Circuit City -- the electronics seller that did end up bankrupt. Now, store shutdowns.
The company's filing with regulators show that it's taking a multifaceted approach to its future offerings. Currently, it has 4,356 domestic stores, of which 606 are franchised. With those brick-and-mortar sites it battles against Hollywood Video and others. In addition to shrinking overall, Blockbuster expects to have more of its stores be the smaller city-based variety, with fewer large structures.
Meanwhile, Blockbuster's Total Access service, with 1.6 million subscribers, has a way to go before it can match the 9.4 million users Netflix claimed at the end of 2008. That makes it the undisputed leader of the 12 million-strong estimated market. Not surprisingly, Blockbuster hopes to grow its own base, and with Americans always looking for convenience -- walking to the mailbox beats driving to the store any day -- perhaps it can.
(If you need more evidence of diverging paths, consider that Netflix saw its revenue go from $682 million in 2005 to in excess of $1.3 billion in 2008. Blockbuster is still bigger in that regard, with sales of some $5.3 billion last year, but that was down from almost $5.9 billion in '05. Growth, of course, is what you want, not backsliding.)
How about rental boxes? Right now, Blockbuster has just under 500 dispensers, and it foresees expanding that a whopping five-fold by the end of this year. Then it's really going to crank up the buildout, envisioning 10,000 by the middle of 2010. Even so, Redbox already claims more than 15,000 units today, and you can be sure more are on the way.
Finally, Blockbuster hopes its On Demand offering, where it goes against the likes of Comcast and Time Warner Cable, will ultimately have a presence "in nearly every connected device." Again, doable, but also again, no easy task.
Can Blockbuster solve the riddles it's facing? Sure. Trouble is, even if it does, it might soon find itself facing new competition from another front you might have heard of -- YouTube, which has reportedly had discussions with a number of big studios about streaming movies via subscription.
What a difference, indeed.
Tuesday, September 15, 2009
Thursday, September 3, 2009
Fire prompts evacuations,but crews make progress
LOS ANGELES – Firefighters brought a sprawling wildfire near Los Angeles under greater control Thursday, despite a flare-up in a remote canyon that prompted about 25 nearby residents to be evacuated.
The blaze was 38 percent contained Thursday morning, up from 28 percent the previous day. The fire now measures 144,743 acres, or 226 square miles, and is one of the largest wildfires in Southern California history.
Despite the overall progress, firefighters encountered a flare-up in the canyon as strong downslope winds "just kind of blew the fire up," said U.S. Forest Service official John Huschke. Twenty-five people in 11 homes were evacuated.
"Everything else looks really good," he said.
Some 12,000 homes in foothill communities below the fire's southeastern edge officially remained threatened, although other communities farther west that were under siege for days were out of danger.
The forecast called for hot and dry weather in the next couple days, with Thursday's high hovering around 100 in the fire area, the National Weather Service said.
The wildfire, now in its eighth day, destroyed 64 homes, burned three people and left two firefighters dead. During the night, a firefighter injured his leg when he fell 20 foot from a cliff and was taken to a hospital by a medical helicopter, officials said. He was in stable condition.
Full containment was expected Sept. 15, meaning fire officials expect that they will have the blaze completely surrounded by then.
Firefighters have been conducting an aerial assault on the fire to complement the efforts on the ground. Helicopters have doused the fire with 1.7 million gallons of water — enough to fill about three Olympic-sized swimming pools — while airplanes have dropped 670,000 gallons of retaradant on the fire.
Many homes were saved, but damaged areas looked like war zones to some returning evacuees.
"It's like, is this really our house? Is it really still here?" T.J. Lynch said about returning to his home in the Tujunga neighborhood late Wednesday. "Because we had made peace with the fact that we'd never see our stuff again."
"It looks like nothing changed, but when the sun comes up tomorrow, I expect we'll see the hills blackened and gray," the screenwriter said. "We'll hike up the hill and see how close it came to our neighbors."
Officials said they were pleased with the progress, but said they have much more work ahead.
"We're changing the pace and treating this as a marathon," U.S. Forest Service incident commander Mike Dietrich said. "If it were a 26-mile race, we'd only be at mile six."
The search for what sparked the blaze intensified Wednesday when U.S. Forest Service investigators gathered along a road in a blackened forest to hunt for clues near where the fire started. They shook soil in a can and planted red, blue and yellow flags to mark evidence beneath a partially burned oak tree at the bottom of a ravine.
Deputy incident commander Carlton Joseph said the fire was "human-caused," meaning it could have been started by anything from a dropped cigarette to a spark from something like a lawn mower. Forest Service officials said there was no lightning in the area at the time and no power lines in the vicinity, but later backtracked on Joseph's comments, saying they are looking at all possible causes.
"The only thing I can say is it is possibly human activity," Forest Service Commander Rita Wears said.
The fire also cast a smoky haze over the Los Angeles area and gave the night sky an eerie glow. The smoke spread throughout the West, affecting air quality in Las Vegas and combining with soot from local fires to block mountain views in Denver.
The blaze was 38 percent contained Thursday morning, up from 28 percent the previous day. The fire now measures 144,743 acres, or 226 square miles, and is one of the largest wildfires in Southern California history.
Despite the overall progress, firefighters encountered a flare-up in the canyon as strong downslope winds "just kind of blew the fire up," said U.S. Forest Service official John Huschke. Twenty-five people in 11 homes were evacuated.
"Everything else looks really good," he said.
Some 12,000 homes in foothill communities below the fire's southeastern edge officially remained threatened, although other communities farther west that were under siege for days were out of danger.
The forecast called for hot and dry weather in the next couple days, with Thursday's high hovering around 100 in the fire area, the National Weather Service said.
The wildfire, now in its eighth day, destroyed 64 homes, burned three people and left two firefighters dead. During the night, a firefighter injured his leg when he fell 20 foot from a cliff and was taken to a hospital by a medical helicopter, officials said. He was in stable condition.
Full containment was expected Sept. 15, meaning fire officials expect that they will have the blaze completely surrounded by then.
Firefighters have been conducting an aerial assault on the fire to complement the efforts on the ground. Helicopters have doused the fire with 1.7 million gallons of water — enough to fill about three Olympic-sized swimming pools — while airplanes have dropped 670,000 gallons of retaradant on the fire.
Many homes were saved, but damaged areas looked like war zones to some returning evacuees.
"It's like, is this really our house? Is it really still here?" T.J. Lynch said about returning to his home in the Tujunga neighborhood late Wednesday. "Because we had made peace with the fact that we'd never see our stuff again."
"It looks like nothing changed, but when the sun comes up tomorrow, I expect we'll see the hills blackened and gray," the screenwriter said. "We'll hike up the hill and see how close it came to our neighbors."
Officials said they were pleased with the progress, but said they have much more work ahead.
"We're changing the pace and treating this as a marathon," U.S. Forest Service incident commander Mike Dietrich said. "If it were a 26-mile race, we'd only be at mile six."
The search for what sparked the blaze intensified Wednesday when U.S. Forest Service investigators gathered along a road in a blackened forest to hunt for clues near where the fire started. They shook soil in a can and planted red, blue and yellow flags to mark evidence beneath a partially burned oak tree at the bottom of a ravine.
Deputy incident commander Carlton Joseph said the fire was "human-caused," meaning it could have been started by anything from a dropped cigarette to a spark from something like a lawn mower. Forest Service officials said there was no lightning in the area at the time and no power lines in the vicinity, but later backtracked on Joseph's comments, saying they are looking at all possible causes.
"The only thing I can say is it is possibly human activity," Forest Service Commander Rita Wears said.
The fire also cast a smoky haze over the Los Angeles area and gave the night sky an eerie glow. The smoke spread throughout the West, affecting air quality in Las Vegas and combining with soot from local fires to block mountain views in Denver.
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