The video game and movie rental giant Blockbuster made interesting comments found in the latest 10-K filing with the Securities and Exchange Commission (SEC) today.
The company warned, “Over the next 12 to 18 months, we expect to continue facing the challenges of the macroeconomic environment, increased industry competition and fragmentation,”
Blockbuster recently has experienced a significant decline in total revenue as consumers shift to different more efficient and cost effective channels from competitors to get their movies.
The movie industry continues to evolve and Blockbuster is simply not well strategically positioned against competitors. Netflix, for example, offers direct movie downloads in high definition directly from Microsoft’s gaming console the Xbox 360, allowing consumers to get movies without ever leaving their homes. Netflix also delivers movies directly via mail and via online streaming.
In January 2008, Blockbuster reported total U.S. sales of $3,607-million, compared to $2,857-million in January 2010. Aggregate sales also declined significantly, from $5,314-million in January 2008, down to $4,062-million in January 2010.
Blockbuster said in the SEC filing it expects U.S. same-store sales in 2010, a key indicator of company performance, to decline in mid-single to high single-digit range.
The company also said it intends to reduce costs by more than $200-million in 2010.
The Blockbuster stock (NYSE:BBI) has lost over 55-percent of its value from 2009, losing 33-percent today alone trading at $0.267 per share.
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