Blockbuster swings to profit! Who’d have thought it?

In the age of video on demand, advertisements touting that Netflix (Nasdaq: NFLX) has rented over two billion movies, the pervasiveness of peer to peer (p2p) networks, and the general drum-beat of the demise of video rental, today’s earnings report from Blockbuster (NYSE: BBI) is a shocker:

“Blockbuster Inc., swung to a first-quarter profit amid prior-year termination fees as domestic same-store sales grew for the first time in five years, though total revenue fell amid a decrease in company-owned stores.”

(Source: WSJ)
The domestic Blockbuster results — which have improved for the first time in the last five years — were driven by a 20% jump in same-store merchandise sales.
Not rentals. Not through-the-mail rentals, even. By in-store merchandise sales.
Which makes sense. Nowadays if you want to buy a DVD and you want to get it now, where do you go? Wal-Mart or Target? Or Blockbuster, where they always seem to have things on sale because they’re selling lightly used rental disks for $5-$8/each? (heck, I’ve bought DVDs at Blockbuster for $1.99, which is cheaper than renting the movie for a week!)
Anyway, fascinating news. Thoughts?

One comment on “Blockbuster swings to profit! Who’d have thought it?

  1. Wow! It is always good for the consumer when multiple companies are competing for customer loyalty in a specific category. I think it is a good sign to see strong business for Blockbuster and Netflix. Good post!
    Mark Salinas, Viscom, MN

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