Since launching in the 80’s, Blockbuster has been synonymous with renting movies. However, the company now finds itself on the brink of bankruptcy and may be forced to close stores across the globe as a result. With debts of £635 and a share price that has dropped to 32 cents per share, the company is struggling to cope with changes in technology. So what has caused Blockbuster’s demise?
A newcomer to the market, DVD kiosks are quickly eating into Blockbusters share of the rental market. Placed within existing retail stores the automated kiosks minimise premises and staffing costs, enabling these savings to be passed on to consumers, undercutting rental prices of traditional high street chains including Blockbuster. In the USA, Redbox have set the pace with DVD kiosks and now have more than 22,000 kiosks in operation giving them a market share of 13% in 2009. The kiosks offer rentals for $1 a night from many of the largest grocery stores in America.
In the UK, Blockbusters 630 stores are coming under threat from Movie Booth (www.themoviebooth.com) DVD kiosks. The company has 50 kiosks in operation spread throughout many of the country’s most well known retail groups, with 5 new locations opening each month. Offering movie rental for £1.50 per night, the company model is based on convenience and price of renting from kiosks leading to UK consumers embrace renting movies from DVD kiosks in the same way the US public has.
Blockbuster themselves have noted the increasing popularity of kiosks and have begun installing their own machines in the USA. However, the question on everybody’s lips is whether it’s a case of too little, too late for the retail giant.
For details of DVD kiosk business opportunities available call 0870 1436769 or email contact@themoviebooth.com.