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Interview: Blockbuster CEO: Skeptics Aside, Confident Of Physical’s Digital Future

imageUpdate: I have tweaked the headline a bit for those who did not get the humor in the headline.

Jim Keyes is very passionate about setting the record straight about Blockbuster (NYSE: BBI), after being declared dead at every point during the last decade. The year-old CEO of the video retailer is eager to clear the misinterpretation about competition with Netflix (NSDQ: NFLX), only being a brick-and-mortar store, its competitive advantage in the long run, and explaining its now-abandoned quest to buy Circuit City. Being the former CEO of 7-Eleven, he does bring some innovative ideas for retail in the future — at least on paper. I put him through the paces in a detailed interview last week after the company’s Q208 earnings announcement. The key, he thinks, is a good balance between physical and electronic, and in the short term, about making making physical media a lot more convenient. He also talked about turning the BB stores into consumer electronics hub, something his company tried to achieve by bidding for Circuit City but now is going to try and do it on its own. The detailed interview, below:

Tons more after the jump….

How does the digital strategy sit with the retraction of advertising TotalAccess online, and the pullback in promoting it to make it more profitable? How can you reconcile those two?

Jim Keyes: I’m glad you asked because this has been an area of a lot of confusion and particularly in the press

9 Responses to “Interview: Blockbuster CEO: Skeptics Aside, Confident Of Physical’s Digital Future”

  1. Nomo Blockbuster

    Mr. Keyes wants Blockbuster to be the at-home solution, but the truth is Blockbuster is the at-home PROBLEM!

    This joker got into the wrong industry and Blockbuster deserves to go under when it’s being run by a fool like him.

  2. I have a feeling the board of directors of Blockbuster are as clueless as this guy or he would not be in a job still. What is the hubris of CEOs and higher-up management that they just don't get it and won't listen to ideas outside of ther narrow mindset? Their hubris keeps them from listening to anyone else or changing an idea once they've stated it. Everywhere I've worked, the kid in the mail-room could tell them better ideas about running the company than they have. Why does the crap rise to the top?
    In 10 years we will have to explain to children what Blockbuster was and they will be in awe that we once had to go somewhere to get a movie. Everything that Blockbuster has tried has been a day late and a dollar short. They are not long for this world and I say good riddance.

  3. As the new president you have some really good ideas about the merchandise mix and presentation. However if you continue with the high turnover rate and unethical terminations going on at the store level, you will end up hurting both your customer return rate as well as the service. Starbucks is a good example of a company that needs to cut back, however re cognizes the value of retention of both its customers and assocaites that have helped build the business. Unclear expectations of associates and poorly communicated membership requirements to your customers can potentially cause alot of damage to ones bottom line. Whether it be verbal annoucements among your customers or within prior associates network of friends; one leaves oneself very, very vulnerable to negative advertising,,,,,,which can do far more damage that all the newspaper ads one might pay for. Just a thought. Sincerely, rt

  4. The BB CEO "seems to be" somewhat out-of-touch with aspects of the user experience and ease-of-use, minimal effort, and low-price consumer requirements. With varying demographics come varying user experience expectations…but IMO all movie demographics trigger the "in the moment" factor that influence user to want a movie, and will only nvest time in search of this entertainment if they have high probability of getting what they want, when they want it…not just the newer releases (which are usually always "sold out" via pre-reserved customers…but the kiosk screen doesn't tell you this…so you invest considerable wasted and fruitless time searching for something you'll never get; then find yourself driving to up to 3 more stores with kiosks to find the $1.oo movie, to no avail; this is where a $1.000 price point escalates significantly given time+fuel+user-experience all turn negative.
    Successful entry into this market will require entertainment provider to be able to offer what I want, when I want it, at a fair price…stop "stealing" time that is at a premium…make the user experience intuitive…easy…introduce voice interface (Nuance Dragon Naturally Speaking), introduce ability for digital mobile phone search for kiosk where a specific movie can be located (or burned), then customer can swing by and pick it up…or have it uploaded to their registered web email inbox for pickup.
    Make it possible for your network of kiosks to upload any digital movie I want…"burn" the DVD/blue-ray or whatever real-time…and let me do this while physically at the kiosk, or via remote upload wherever I might be…the diskette need not be returned and is "read-only", good for up play up to 5 days or so when the digital image "self destructs" by self "overwritten" with binary (zeroes and ones) that would basically corrupt the digital-audio tracks, user then deletes rental as if it were a fiuser from desiring reuse or copyingck it up in person at the kiosktime requirementVideo-on-Demand (VOD).

  5. I agree with Mr. Watson. I use Netflix alot to watch entire seasons of several TV shows. Also, many of the movies I rent aren't new. I don't know about Blockbuster, but Netflix' library is very extensive and has many foreign films that I'm looking for.

  6. Chris Watson

    This guy is *scary* clueless about his own market!

    I want waaay more than the most recent titles; my 9 year old daughter and I are watching an entire TV series together – something that old Jimbo would miss out on. My wife just finished watching the entire Beauty and the Beast TV series.

    I like the new but the old TV series that my wife and I can share with our kids is what keeps us going with Netflix.

  7. There is a typo, your article says: "There’s an $8 billion industry by mail and we’ve got a healthy piece of that."

    I think it should say "There’s an $1.8 billion industry by mail and we’ve got a healthy piece of that."

  8. Michael Saltzman

    Have you been in a Blockbuster lately? The 4 stores around me are a dump! They have NO selection/no product/ Its a mix of games/used DVD's (for sale) new DVD's for Sale and virtually no films to rent. Trying to find a film that 'hasn't JUST been released on DVD is impossible"…Most of the stores I've been in recently have 1 or 2 employees trying to do everything (sort/sell/clean/etc). Most people 'may' want to rent on impulse- however…if there's nothing in the store to rent- What's the point? They may have a good selection on line- but if there's nothing in the store to rent- once I'm done with my rental on line- What's the difference if I can't find anything in the stores to rent.
    These stores all suffer from lack of attention over the years. Trying to be everything to everyone doesn't work!