when netflix absolutely dominates blockbuster stock?? i thought
netflix was a second class internet stock......apparently w/ a market
cap of 2.21B compared to 552.1M (blockbuster).....i am completely
wrong....

The kind of "psycho-parallel universe" that understands how to read a
balance sheet and growth prospects.  BBI has $755 million of debt
versus $0 for NFLX, which will surly be ramped up if the CC purchase
goes through.  Net margins are higher at NFLX, 5.4 versus 0.2,
projected for FY 2008.  Revenue growth projects for the next 5 years
are -1.5% for BBI, NFLX projections are 15%.  All numbers taken from
Valueline.

No leverage, low overhead, and sales growth make for a profitable
company in a low margin business.

netflix has been dominating bbi for quite some time now. you just
haven't been living in reality.

Sorry to hijack the thread, but don't you all think BBI's attempt to
acquire Circuit City is good news for NFLX?  That is a scary deal.
Tells me that BBI management is very, very, very confident that it
cannot become profitable - ever - without making a serious entre into
hardcore retail selling.  Isn't that kind of like admitting NFLX
wins?  Even if BBI somehow gets the financing to do that deal and
figures out how to merge the companies profitably (I'm doubtful that
will be remotely easy), will it really be a video-rental chain when it
comes out the other side?  Doesn't it seem like that deal, if it
happens, will cause BBI to lose its video rental focus for at least a
number of years?  And don't we all agree that the next three, four,
whatever, years are going to be the salad days for video rental before
VOD starts taking ever bigger chunks of the rental space?  Is BBI even
interested in renting movies anymore?  Even in a worst-case scenario
for a NFLX investor - what part of this deal hurts NFLX?  I only see
that it could damage its effort to partner with LG and other companies
to bring NFLX services into the actual hardware.  Presumably, Circuit
City/BBI could refuse to retail hardware containing NFLX software.
But could it really?  Can a Circuit City afford to refuse to stock
whole companies and still fend off Best Buy (which already takes its
lunch money everday).  I think all signs point to a brighter future
for NFLX.   So, pray that there are still lenders out there looking to
take on a huge risk by loaning BBI a billion dollars.

The numbers don't lie, and NFLX has the better financials. Whats so
odd about the new CEO, from a retail background, trying to diversify
BBI's holdings to include resale of media hardware (instead of just
leasing intellectual properties)? Diversifying this business makes it
more stable to me, and what better compliment to a game/movie rental
company than to sell the TV's and gaming systems you watch the rentals
on?

BBI doesn't have to beat NFLX, CC doesnt' have to beat Best Buy, they
only have to earn a competitive return and BBI's PPS will jump.

People saying BBI will sell Blockbuster Online to NFLX doesn't make
sense... why would regulators approve that?

No way that DOJ/FTC considers sale of BBI online rental services to
NFLX creates an anticompetitive monopoly.  There are too many
competitors in the marketplace.  Consider the barriers to entry in
satellite radio and yet ultimately DOJ approved the XM Sirius merger.
Simply put, not a concern.  I can't imaging BBI would sell its online
to NFLX though.  Why would they do that?  Just to raise capital?
Seems pennywise and pound foolish to me - basically, I disagree with
that article.

Everyone would agree dvd renting will become obsolete in the coming
years.  But because netflix's business model is capitalism at its
finest, people begrudge Blockbuster.....rightfully so, based on the
past.  But now with the CC offer the Analysts are all against it?
Blockbuster's new executive team has clearly shown its interest in
diversifying.  What has Netflix done?  10Million subscribers?
2Million people walk into Blockbuster EVERYDAY.  Blockbuster doesn't
feel like Netflix is a direct competitor, otherwise they would have
continued with Total Access.

No one can argue that the brand recognition for BBI is 10 times
greater than Netflix.  There is so much more intrinsic value with
Blockbuster.  When the download days come, it will be highly doubtful
Netflix will beat Apple, Amazon, Microsoft, let alone Blockbuster.
What is Netflix doing to diversify?
"Be fearful when others are greedy and greedy when others are fearful"-
Warren Buffett
I think this pertains perfectly to Netflix and Blockbuster.

Coltvar, what are you smoking?

Blockbuster doesnt consider Netflix to be worthwhile?

Thats why Blockbuster is hemmoraging money, and NFLX is turning higher
and higher profits ever quarter.

Not to mention, NFLX is now a much, much larger company than BBI...

"Blockbuster doesn't
feel like Netflix is a direct competitor, otherwise they would have
continued with Total Access. "

HAHHAHA WOW there's some backwards logic! God I don't even know where
to start...

If someone has a lemonade stand, and you think you can do it better -
you go open a better lemonade stand. You don't say "enh, I can do it
better, so I won't"

Good lord. Hilarious.

I <3 cephyn

Someone selling you lemonade online and CANT open a stand next to you
is indirect.  I'd say if someone is thirsty and wants a glass of
lemonade, they sure don't want to wait 3 days for the
lemonade.......having to wait, certainly isn't direct.

They don't feel like they're direct because of the direction they're
moving towards.  Amazon and Netflix are direct.  Hollywood and BBI are
direct.  Identical services, by definition is direct competition.  It
doesn't mean they aren't competitors.  Did either of you go to
business school?  Just curious.

Where is Netflix going to diversify into geniuses?  Their competitive
advantage is CHEAP rentals.  Blockbuster at least has options.

I don't think BBI will sell the DVD rental by mail business to NFLX.
Just imagine that with BBI Total Access plan, you can exchange DVD in
your local CircuitCity for free.  Does it save BBI money to maintain a
CircuitCity store than regular a BBI rental store?  If the answer is
yes, then NFLX is going to face grow challenge very soon if BBI
brought CircuitCity.  If the answer is no, then NFLX is going to keep
eating BBI's lunch.  By the way, exchange DVD in CircuitCity store
will drive more traffic to CircuitCity store, that maybe a good thing
for CircuitCity.  Who knows.

"Just imagine that with BBI Total Access plan, you can exchange DVD in
your local CircuitCity for free."

Yeah, they already tried this. It's exactly what killed TA and made it
unprofitable.

"Amazon and Netflix are direct.  Hollywood and BBI are
direct.  Identical services, by definition is direct competition."

Well, Amazon doesn't rent movies. BBI does. And with their online
offering, they did it online. Online Movie Rental. DIRECT competition
with Netflix - Online Movie Rental. Direct. Your definition.

They opened up their lemonade stand, found out they couldn't compete,
and decided to stop mentioning they even had a lemonade stand. That's
what happens when you lose in direct competition.

What percentage of $5.5Billion in sales is online for Blockbuster?
Less than 10%. You are comparing your lemonade stand to a juice
stand.  They compete indirectly.

"They opened up their lemonade stand, found out they couldn't
compete,
and decided to stop mentioning they even had a lemonade stand. That's
what happens when you lose in direct competition."

$5.5Billion to $1.2Billion in sales is losing huh.....I can definitely
tell cephyn didn't go to business school.

You can't even follow an argument. You claim BBI ditched total access
because they didn't see netflix as competition. Turns out, they
voluntarily went into direct competition with their online offering,
and lost. That's why they are no longer in direct competition - they
couldn't beat netflix.

And sales are great - you can have zillions in sales, but it doesn't
matter if you can't turn a profit.

It's not how much you make, but how much you keep that is important.

Netflix is buying the rights to as many independent movies as
possible.  In a few years you might see "Sundance Film Festival
brought to you by Netflix"

If profits aren't distributed to shareholders, it then matters what
they're spending retained earnings on.  I guess Netlix bulls have to
look forward to sponsoring the Sundance Film Festival.  Thats worth a
HUGE premium!!!

Cephyn, indirect competition doesn't mean they aren't competing. Its
business 101. Give it up....

OH ok, so now you're saying they ARE competing. And BBI got their
tails handed to them. Thanks for agreeing, finally.

Did anyone ever think that BBI total access fail not because it could
compete with ntflx buisness model but rather there is a large part of
the population ( ie BBI customers ~ 70% of video renters market) who
don't want to do online rentals.  BBI has more rental customers then
ntflx but there over head is killing them.  If you don't beleive me
look at the total revenue for both companies and not just the profit
or market cap.  If BBI had the same expense margins as ntflx they
would squish them like a flea on the bottom of an elephants foot.
Thus CC deal makes sense, the sale of retail will help to minimize
ther expensise margin, and make BBI very profitable.

Thank you Ja, that has been my point exactly.  They tried to compete
directly Online and lost, which is less than 10% of their
revenue.....they're an IN STORE RENTAL company, not online.  New
managements whole mantra is becoming more efficient with their
competitive advantage of real estate location, NOT ONLINE.
Cephyn can't grasp the different types of competition.

@ja: IF IF IF - lots of ifs in there. Fact is - they don't.

@colt: glad you are finally coming around. they tried to compete
online and lost. now they are no longer competition. and if you look
at what BBI is doing, they're no longer aiming to be an IN STORE
RENTAL company either. They're trying to be some sort of Gamespot/BBI/
Suncoast hybrid. We'll just have to see if that works. But don't kid
yourself - they are moving away from rental.

I grasp plenty.

LMAO,

You are hilarious.

I would delivery the bloody lemonade direct to the door like NFLX.

And once you have the delivery routine who can steal the lemonade
subscription as a newcomer? i.e. BBI?
BBI then must come up with a better alternative to delivering lemonade
than NFLX. I bought in 3000 at U$30.00