Blockbuster (BBI) CEO John Antioco has left a positive impression on investors. The new Total Access program that is in direct competition with NetFlix is experiencing great success online in combination with brick and mortar Blockbuster stores. The company smashed previous subscriber promises by taking on 2.2 million subscribers so far, which is 500,000 added just in the 4th quarter, all due to unleashing Total Access in November. Everyone loves a bargain stock, and Blockbuster is definitely a bargain at 6.27. At the time I wrote this, I imagine it will be much higher. Today, Antioco told Citigroup that he wouldn’t be surprised if BBI doubled its subscribers in 2007, with the success of Total Access (its largest competition, NetFlix, has 6.3 million subscribers). Citigroup, after that meeting, changed its price target to now $6.50.
This guest post was written by Ryan Donnell.
I agree that the Total Access Program is going to be work well for Blockbuster. I haven’t looked into the technicals of Blockbusters stock, but I can atest to my first hand customer experince.
I have been a subscriber of Blockbuster Online since its inception. The service has be great so far, and is comparable to NetFlix. The one advantage to NetFlix, and the sole reason I continue with BB, is that I get monthly coupons I can use in their stores. That way I rent a free movie right now, instead of being at the mercy of the postal system.
The new Total Access program builds upon this idea. Now I can return my Online rentals to the store, and recieve another free movie. This adds tremendous value over NetFlix and takes advantage of their exisitng network of stores. By giving an increased incentive for customers to come INTO the stores, it will drive up high margin sales like candy, popcorn and dvd sales. This tactical shift has turned the position of Blockbuster into a solid contender to NetFlix.
Great point on the front-end store sales. Getting customers into your store is definitely a major part of the total access plan.
I love that Blockbuster gives the customer complete control over their movie renting habits. No longer must we wait for a new movie, when we can simply go to the store and get a free coupon.
Netflix cannot compete with a store that builds its customer base online and offline. I don’t see the point of anyone holding Netflix shares now that Blockbuster has finally gotten their act together.
As for dealing with Blockbuster stores, Hollywood Video is the only renting store in my neighborhood. There used to be a blockbuster right around the corner, but I think they relocated their store. I wish Blockbuster was still there!