Blockbuster bids over $1B for Circuit City, looks to rival Apple stores

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  • Reply 21 of 50
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by coolflash View Post


    Sure Blockbuster and Circuit City are faltering companies, but the idea of acquiring companies is a good idea in theory (if the right company is purchased and then this new acquistion is integrated correctly). As I and others have thought, why doesn't Apple just buy Tivo and Netflix to add to appleTV's capabilities and assume the direct leadership in the "new media" "wars." The internet (appleTV, Tivo, Netflix) is by far going to be the future access point for all digital media, so why not take a lead by buying a lead (buying, then incorporating Tivo and Netflix into apppleTV). All companies do this. Let's do it apple--I really want to "need" an AppleTV.



    Netflix isn't a necessary component, I don't think they have download rental rights to (m)any more movies than Apple does. Currently, their strength is in their DVD library, but that doesn't translate to internet rentals at all, or any better than Apple can.
  • Reply 22 of 50
    quinneyquinney Posts: 2,528member
    I also wonder who is going to lend Blockbuster the money to do this deal.

    They are already deep in debt and hardly have cash to cover their current

    liabilities. Credit markets are tight and very cautious now.
  • Reply 23 of 50
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by solipsism View Post


    So Blockbuster plans to save two sinking ships by lashing them together. I don't see this working out without something entirely new to add to the mix.



    I was trying to come up with the perfect analogy, but I think you nailed it on the head. And the comparison to Apple's stores is laugable at best. Apple has a line of products that they have 100% control over marketing for. So they can create the store experience to fit their product line. Even if Blockbuster had their own set-top box, that's just one device. You don't need very much shelf-space for just one device.



    Thinking back to the old days when VCRs were too expensive for individuals to buy, when you went to the video store to rent movies, you also rented the VCP (video cassette player). Perhaps Blockbuster should revive that old business model and start renting Blu-ray players along with Blu-ray movies. If they don't do something to get customers hooked on Blu-ray quickly, we are all just going to skip over physical media and go for downloads, even at the lower quality (it'll be a few years yet before HD downloads become practical for the majority of potential users).



    Quote:
    Originally Posted by coolflash View Post


    Sure Blockbuster and Circuit City are faltering companies, but the idea of acquiring companies is a good idea in theory (if the right company is purchased and then this new acquistion is integrated correctly). As I and others have thought, why doesn't Apple just buy Tivo and Netflix to add to appleTV's capabilities and assume the direct leadership in the "new media" "wars." The internet (appleTV, Tivo, Netflix) is by far going to be the future access point for all digital media, so why not take a lead by buying a lead (buying, then incorporating Tivo and Netflix into apppleTV). All companies do this. Let's do it apple--I really want to "need" an AppleTV.



    I think it's too late for that. TiVo has too much tied up in contracts with Comcast, and TiVo boxes already do much of what AppleTV does including renting movie downloads, viewing photos off your computer or from online sources, playing music (non-DRM only, of course), and later this year playing video off YouTube. So there is already a lot of overlap in functionality.



    The only new thing Apple would gain is the DVR functionality. And given the horrid state of the cable industry's standards for 3rd party boxes hooking into their cable systems, I really don't see Apple wanting to play in that wasteland. TiVo can barely make it work while keeping up with the evolving standards; and then it's only with the close cooperation of the cable industry. Given Apple's selling and renting of content, which threatens to make cable television obsolete, I wouldn't see that level of cooperation continuing if Apple bought TiVo. And now that TiVo is licensing their software to Comcast to include on their Motorola set-top boxes, Apple would be stuck with those contracts as well.



    Adding DVR functionality to AppleTV would be cool. But buying TiVo is most certainly NOT the way to do it. I think the best we could ever hope for would be a over-the-air broadcast tuner in AppleTV in order to get local channels for sports, weather, and news. But then Apple would expect you to get the rest of your content from the iTunes Store.



    And I still think the best thing would be if the networks would start "broadcasting" their entire lineups via Podcasts. Even include the commercials for all I care, or get Apple to have rentals for TV shows (like movies, I only need to see them once!). Oh, and make the TV shows HD! I already get my daily nightly news broadcast via Podcast, and many of the shows I watch I could get from iTunes.



    We are close to being able to cut out the cable company entirely and just download everything. Why would Apple want to include a DVR if the goal is to replace the cable company?
  • Reply 24 of 50
    Combining two failing businesses makes no sense. If Blockbuster does not have enough floor space for their new concept why didn’t they buy some closing CompUSA stores for a cheap price instead of buying Circuit City for a premium cost. Could their limited new electronics really not fit into the existing stores? Blockbuster closed locations near my home.



    And I will not walk into a Circuit City store after the way they treated their employees. You have proven to be a good dependable employee that will help people, keep displays working properly, have them return as customers and then recommend us to friends? Well you got a raise so you’re fired. After all it is the corporate executives that do all of the work that gets people to buy from us. Employees that have contact with the public are worthless.



    And forget Premium stores. People will get their information and then buy from the cheapest place possible. The one exception to this is a company like Apple. Customers do think that it makes more sense to buy direct from the manufacturer, even if there is a slightly better deal elsewhere.
  • Reply 25 of 50
    SpamSandwichSpamSandwich Posts: 33,407member
    Quote:
    Originally Posted by Thomaspin View Post


    Tie two rocks together and they still sink.



    On the nose comment.
  • Reply 26 of 50
    Quote:
    Originally Posted by crees! View Post


    Blockbuster just sells movies and games. It doesn't currently make hardware or software. Circuit City doesn't make hardware or software either. More players are obviously needed in this venture and so far it looks like the ship is sinking even before it has left port.



    I agree. My thoughts reading this article exactly!



    Sounds like a really lame attempt to tap into Apple's market. What are they thinking?
  • Reply 27 of 50
    thomprthompr Posts: 1,516member
    Gee, I wish someone would hire me as a CEO and pay me those outrageous salaries. I could come up with crappy ideas like this on a daily basis.



    Seriously, does anybody really think that this is a good idea? I mean, what is Blockbuster going to do with all of that (costly to operate) Circuit City floor-space other than sell the same stuff that they are selling now plus perhaps a new gadget or two that works with whatever vision Blockbuster has to enter the race to the digital future? The displays for that new stuff will take up all of perhaps 200 square feet. Is the rest of the store still going to carry the same old stuff with the same clueless sales staff? Bombs away.



    If Blockbuster wants to emulate Apple, they should REALLY emulate Apple: put a smallish, but informative, tasteful and compelling, display of their AppleTV killer (as if they will ever have one, but what if...) in most of their strategically located stores, and then rent some space from Best Buy to showcase their wares there too. Attempting a full blown entry into retail with a large-footprint store (especially one that is failing) is just a bad bad idea.



    Thompson
  • Reply 28 of 50
    I wonder if the idea of this merger ending up with a "store like Apple" is originating from Blockbuster management. Sounds rather clueless to me. Look at how empty the Sony Stores are compared to Apple, the local one (Sony) is like a museum compared to the Apple store in the same complex.



    What synergy is there between Blockbuster and Circuit City? And what would one end up with in the merger?

    While it is a good idea for Blockbuster to reinvent itself in the face of netflix and downloads, why take on a failed retailer? To sell Dishwashers and Blu Ray DVDs?



    Apple's retail stores have a well thought out approach and a strong theme and design. Is Blockbuster going to gut all the existing Circuit City stores to redesign them under the guidance of a top industrial retail designer?

    Or will they just do a "mashup" of what they have?



    Perhaps they can reintroduce DiVX again only with expiring Blu-ray discs.
  • Reply 29 of 50
    sandrosandro Posts: 21member
    Blockbuster expects to compete with the Apple Store by buying Circuit Shitty?! I would love to see them try, I wouldn't mind both companies going under, which is the most likely outcome of such a poorly thought merger.



    I wouldn't step in a Ballbuster or Circuit Shitty on a bet, much less make a purchase. They are going to need a lot of luck and plenty of clueless customers to even have a hint of a hope. I can't wait to see the slow motion train wreck that this merger would produce.
  • Reply 30 of 50
    zanshinzanshin Posts: 350member
    I think maybe only Sony.



    They make computers, monitors and accessories. They have private-labeled media development software to go on them.



    They make PlayStation game consoles, and have plenty of labels to sell with them.



    They make TONS of consumer electronics and accessories to show off. Audio and Video. And movie studios and recording artists creating content to showcase and offer with them.



    They have distinct Consumer and Professional level product offerings.



    They make personal electronics, home electronics, workplace electronics, automobile electronics, etc.



    And they can hire enough talent to give them style.



    Circuit City and Blockbuster make nothing. (Not even much cash.) Their "style" is no different than any other retail store. They have nothing unique to offer, because everything they have, you can get somewhere else.



    Without a unique offering, you have nothing that rivals the Apple store.
  • Reply 31 of 50
    bageljoeybageljoey Posts: 1,969member
    Hold on.

    While this piling on is apparently fun, I think it might be a bit unfair. If you read the AI article closely, nowhere does it say that Blockbuster actually compared its proposed collaboration with CC to the Apple Store retail model. I checked some other financial sites discussing the proposed merger and none of them mentioned the Apple Store concept.



    I have not seen what Blockbuster actually said, but I think it is quite possible that AI just stuck that in there because they needed a reference to Apple so people wouldn't complain about a non Apple story being posted...



    I do not know what Blockbuster's plan is, and I do not have great faith in their ability to pull it off, but saying they want to be an "Apple Store Killer" may be a little unfair.



    More than likely, Blockbuster saw a company with huge annual sales but a low valuation and thought that they might be able to make some money off of it somehow. Here is an article from 2 weeks ago that shows that some people were starting to think CC was worth a look linky
  • Reply 32 of 50
    wilcowilco Posts: 985member
    Quote:
    Originally Posted by sandro View Post


    I wouldn't step in a Ballbuster or Circuit Shitty on a bet...



    Does your mommy know you're using the computer without supervision?
  • Reply 33 of 50
    res08haores08hao Posts: 114member
    Quote:
    Originally Posted by AppleInsider View Post


    Movie rental house Blockbuster has made an unsolicited takeover bid for struggling electronics retailer Circuit City, a move that aims to combine the stores of both companies into "a game-changing retail concept" akin to Apple Inc.'s widely successful international retail operation.



    Blockbuster made the all-cash offer of $6.00 to $8.00 per share in a February 17th letter to Circuit City's chairman following months of informal negotiations between the two companies, the company revealed in a statement Monday. Based on the closing price of Circuit City's 168.4 million shares on December 31, 2007, the deal values the No. 2 US electronics retailer at approximately $1.01 to $1.35 billion.



    Blockbuster said the combination of the two companies would result in an $18 billion global retail enterprise uniquely positioned to capitalize on the growing convergence of media content and electronic devices, which has thus far been dominated by the efforts of Cupertino-based Apple through its tightly-knit ecosystem of hardware, software, and online services.



    Word of the offer comes a week after reports suggested that Blockbuster was also evaluating a plan to enter the electronics hardware business with a set-top-box that, like Apple TV, would allow customers of its Movielink service to stream movie rentals to their high-definition TV sets.



    "Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage," said Blockbuster chief executive Jim Keyes. "We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies."



    Circuit City, which operates nearly 700 stores across the US, had yet to respond to Blockbuster's offer as of Monday, compelling the movie rental chain to make its proposal public because "it believes the shareholders of Circuit City should have the opportunity to participate in determining the destiny of the company."



    Should the deal ultimately receive approval, it will form a combined retail chain of over 9,500 stores, including nearly 6,000 in the US. By comparison, Apple along with electronics retail partner Best Buy currently operate around 800 US-based retail points for the former's electronic device offerings.



    Blockbuster isn't the only technology player looking to replicate the success of Apple's retail business. Last week it was reported the Microsoft is also mulling the prospect of opening a self-branded chain of retail stores to promote its Windows franchise.



    blockbuster should rename itself "Me Too".

    And just what would they put in their new stores? More windows/ballmer junk? what a joke.
  • Reply 34 of 50
    echosonicechosonic Posts: 462member
    The Apple Store is the Brick-and-mortar place where people go to get the products that free them from having to go to other brick-and-mortar places.



    Dear CC and BB CEOs:



    When you're stupid, its for a long time.
  • Reply 35 of 50
    "We are close to being able to cut out the cable company entirely and just download everything. Why would Apple want to include a DVR if the goal is to replace the cable company?"



    Great thoughts. How soon can I cancel my expensive Comcast? All I really use it is for a few weekly televisions shows, CNN, and Colbert
  • Reply 36 of 50
    echosonicechosonic Posts: 462member
    Quote:
    Originally Posted by Bageljoey View Post


    Hold on.

    If you read the AI article closely, nowhere does it say that Blockbuster actually compared its proposed collaboration with CC to the Apple Store retail model.



    I have not seen what Blockbuster actually said...



    What they actually said was:



    "Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage...We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies."



    And then they promptly neglected to describe, expound upon, or hint as to how it would be so in any way shape or form.



    In other words, they could as easily have said:





    "cliche cliche game-changing-cliche, cliche cliche synergies cliche."
  • Reply 37 of 50
    superbasssuperbass Posts: 688member
    I know everybody here is bashing and laughing at this merger, but I don't think very many people are actually thinking about it first.



    If the newly merged company puts a good online download store together in a similar style to Amazon that allows music downloads, they'll also be able to include an online movie rental/download service a la iTunes.



    While it's true that Apple already offers movie rentals and sales, they don't have anywhere near the same kinds of agreements with the studios/catalogue that Blockbuster has, and they don't distribute movies outside the US yet, which Blockbuster does.



    Blockbuster realizes that the physical movie rental business is being replaced by downloading, but at the same time, existing sites like iTunes and Amazon offer music as well as films. Buying Circuit City gives them full access to the music market as well as their existing film agreements. The electronics distribution they get from Circuit City could also prove valuable, especially when you consider that CC carries not only Apple products, but also just about every other brand.



    I'd say it's reasonable to assume that they'll also save a bunch of money short-term by having CC's eat nearby Blockbusters and they can use the millions they make laying Blockbuster people off and selling real estate to finance their foray into the downloadable content market.
  • Reply 38 of 50
    jsavagejsavage Posts: 13member
    Quote:
    Originally Posted by solipsism View Post


    So Blockbuster plans to save two sinking ships by lashing them together. I don't see this working out without something entirely new to add to the mix.



    By lashing two sinking ships together, one hopes to alleviate management overhead such that the previously administrative-only roles of captain and navigator..etc may be reassigned to bailer positions. Thus this increases the total number of bailers, increasing the overall gallons-per-minute that can be returned to the sea. An effective execution will keep the ships from sinking.



    Then, however, lack of adequate administrative oversight might spear the ship on an iReef.





    I know this sounds desperate, but the guys deserve some credit for trying.
  • Reply 39 of 50
    Quote:
    Originally Posted by solipsism View Post


    So Blockbuster plans to save two sinking ships by lashing them together. I don't see this working out without something entirely new to add to the mix.



    Like buying TiVo and Sling.
  • Reply 40 of 50
    chris_cachris_ca Posts: 2,543member
    Quote:
    Originally Posted by solipsism View Post


    So Blockbuster plans to save two sinking ships by lashing them together. I don't see this working out without something entirely new to add to the mix.



    It'll simply make it easier when they fold. Instead of two companies, it'll only be one.
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