The movie-rental business is in the middle of a digital revolution.
Internet-enabled TVs will allow direct downloading of movies. And
industry leaders are battling to snap up a potentially huge long-term
revenue stream. Andrew Snyder says investors should look to the firms like TiVo (NASDAQ:TIVO) and Sonic Solutions (NASDAQ:SNIC), who sell the technology to make this all happen.
This from Today’s Financial News:
Last night, I sat down at the kitchen table and realized I was a bit
lopsided. I checked to see if the chair was broken. It checked out. I
sniffed my glass of water to make sure it wasn’t tainted. It was
alcohol free.
It turns out my overstuffed wallet was the culprit. My worn-out
leather companion has slowly grown to nearly two inches in thickness.
The growth cannot because of an accumulation of greenbacks. You have a
better chance of finding a moth infestation than more than forty bucks
in cash in my back pocket.
The culprit was a collection of gift and membership cards. As I
started digging through the mess, I uncovered memories I had long
forgotten, like my membership to a local gym. I called to see if it was
still active. The kind lady that answered the phone told me the gym
closed over two years ago. No wonder I have not been going.
As my stack of “throw-away” cards grew to over an inch in thickness, I hesitated when I got to my Blockbuster (NYSE:BBI)
membership card. I hadn’t used the thing in at least a year, but had a
tough time convincing myself that would be a long-term trend. After
all, I am recently married and that means I will be spending a lot more
time at home, snuggling on the couch. Ugh…
In the end, I decided to experiment and toss the rectangular piece
of plastic into the hopper that will ensure it is buried for all of
eternity. I think I made the right decision.
The Internet killed the video star
Blockbuster is in a ferocious industry battle. The video-rental company was doing fine, even leading its industry, until Netflix (NASDAQ:NFLX)
came along and changed the rules of the game. No longer do consumers
have to get in their cars and shell out four or five bucks for a movie
that is due back in a couple of days. Thanks to Netflix, they are
delivered straight to a subscriber’s door.
Blockbuster enjoyed nearly half of the industry’s “store” business,
but cannot get anywhere close to a leadership position in the
industry’s new monthly subscription business.
