Blockbuster CEO: I Wanna Be Like Apple

I'm reading remarks that Blockbuster (BBI) CEO Jim Keyes said to USA Today explaining the bid for Circuit City (CC), and I can't help wondering what planet Keyes has been on.

Some stuff from the story:

The plan to blend entertainment hardware, software and service "is a game changer," Blockbuster CEO Jim Keyes says.

Really? A game changer? More than the iPod-iTunes combo? More than TiVo was? Blockbuster-Circuit City -- two struggling retailers who as far as I know have no R&D lab and little ability to innovate -- is going to do that?

"As a customer, if you have any experience with digital content, trying to load devices or watch movies on a PC, you're probably thinking: There's got to be a better way. We think we have an opportunity to break through the consumer confusion and frustration."

For the most part, you put the DVD into the slot on the PC and, voila, a movie plays. Or you click on a TV show on Hulu, or a song on iTunes, and it just plays. What problem does Keyes think he can solve? Oh -- right -- Blockbuster bought Movielink, the highly unsuccessful online movie site that's always been too hard to use.

He says things are moving fast in home video: For example, Apple's iTunes recently began to rent digitally downloaded videos. "We will be in (consumer electronics) on our own, or with Circuit City," Keyes says. "The combination simply allows us to accelerate" that plan.

Yes, Blockbuster is planning to sell a set-top box for movies, and just about every blogger out there is ridiculing it. The idea seems like too little, too late.

"The magic in the Apple store is bringing hardware, software and service all together," Keyes says. "They make it easy for the consumer."

Ah, and Keyes thinks Blockbuster and Circuit City can replicate the popularity of the Apple (AAPL) Stores? Does he understand that a big part of the attraction is the actual Apple products? That plus the coolness factor that makes people want to hang out there? Has anyone ever felt any coolness about a Blockbuster store? How about 7-Eleven, which Keyes used to run?

This sounds like a lot of bluster from someone who doesn't know the tech industry.

Comments

[User 170287:]

You pretend to know everything

2008 Apr 16 06:35 AM

[Danthemason:]

He wrote an article with a few obvious connections made from past actions and current behavior. And he signed it. WTF is your comment supposed to be. I've decoded the numerology of your 170287, it means small brain, big mouth. Get off the web you parasite.

2008 Apr 16 06:47 AM

[Rob L:]

Maybe Blockbuster was better off without a CEO.

2008 Apr 16 07:46 AM

[tom1234:]

some times chickens some times feathers----WHAT !!!

2008 Apr 16 08:19 AM

[Dan Poarch:]

Circuit City did bring us the DIVX format... Not sure what else B-buster and Circuit City can do to face the tide. Perhaps they actually see this merger as necessary to be acquired by someone who really could push content, Microsoft maybe? Perhaps he wanted to attract Steve Jobs' attention with his cute little comment? I don't know... But do know that nobody will want these two until they get down to firesale prices, assuming that's their plan.

2008 Apr 16 08:27 AM

[youneverknow:]

You can't write off a seasoned experienced CEO who has turned BBI to a pretty good profit in a short time. This is a can do guy and my guess is that he will find a way to put BBI on track. Maybe the CC deal will fail, but I do not think he is deluded or uninformed.

2008 Apr 16 09:52 AM

[heirbrande:]

I have a different opinion. I think this is a good pairing IF the management is good. Supposedly, Blockbuster has good management and CC doesn't. Maybe the CC side can benefit from that. But I think the reason this makes more sense than people are crediting to the deal is that video is Blockbuster's domain and music is Apple's by way of the iPod. If Blockbuster doesn't go after video streaming that is more accessible than via mail (remember their version TotalAccess is not that great) then someone will, which would make the Blockbuster we know today irrelevant. With TVs going all digital next year, there is bound to be a merger of the internet and television programming. Microsoft realized this years ago, trying to push their media center version of Windows. However, like many things MS has come up with, they are before their time and some of their ideas would be better suited on the set of Star Trek at the time of their introducition. For example VOIP was pitched by MS long before Vonage, Skype or Packet8 under NetMeeting. I tried it way back then and thought "this is pretty neat but kind of cumbersome to have to have speakers and mic's on both ends."
Apple is aware of the convergence, which is why they have tried their hands at Apple TV. Jobs is not really interested in becoming a TV producer -- yet.
Now, recall Google's early beginnings Nov 6 1999 on the way backmachine: web.archive.org/web/19... It's kind of cute because of the "Try our special searches:" phrase.At the time, it was hard to think Google would be what it is today.
Believe that if Google had the chance to get into the mainstream media whether by buying up broadcasting spectrum or through cable, they will do it. For Google though, it is not a financially sound plan because they would have trouble scaling and afterall, they are in the advertising business not TV broadcasting business. So better for Google to wait a little longer to jump in.

Blockbuster's CEO and Icahn as well as Jobs and probably those at Google and Microsoft realize the tremendous potential of connecting to people using something many use everyday (other than the cell phone), their television. My opinion is that many more people use a TV than an iPod. True, Apple has it's Apple store, but Circuit City could BE Blockbuster's Apple store. My prediction is that some other company will partner with Blockbuster to help deliver not only movies, but also other media via it's set-op box. Blockbuster has amazing name recognition so they will push other plays right out of the water. A coupany like Microsoft or Google can jump on board later. Circuit Buster, or whatever it will be called, can distribute the next new gadget in their stores then the content providers will line up to push their software products. I see a model kind of like Sirius satellite radio just the content is both audio and video instead of just audio.

2008 Apr 16 10:05 AM

[BudH:]

It might just work. TVs and DVDs at Blockbuster for sale, right there in front of the movie renters. Movies returned to circuit city, bringing customers into the store. Video games to boot. Double the outlets now for each.

2008 Apr 16 10:16 AM

[DickM:]

OK, now place a bet it will work. You know, a probability from 0% to 100% sure he can do it. No could be's, no if's, no but maybe's. Spell if out with ALL the things that MUST go right for this to be something other than a wet dream.

Right. I know you wouldn't dare to do that. And if you say you don't know enough or, say one element in the probability is that someone else (outsider) will suddenly step up to the plate to finance the entire marketing and R&D and the probability of that is, say 10%, then automatically the likelihood of this ever happening is less than 1%.

Forget it.

2008 Apr 16 10:44 AM

[deaverb:]

Impresssive article willing to state what "some" would think obvious (but clearly not the CEO of Blockbuster) and build upon it. Sounds like two drunks trying to cure themselves. As the author states, they have no innovative talent where Apple is loaded both inside and out. There is no "second" to Apple; it is cool in a very special way, as google is. Both suffer from being on the wrong side of Clayton Christiansen's The Innovator Dilemma (I refer to a lot, but I don't think too much), simpler and cheaper wins. Netflix doesn't "punish you" for being late; that's why I use them. Our local video stores closed first; Blockbuster not yet--but traffic is lousy (parking lot observation). CC is a weak alternative to BBY. CompUSA went out which gave their business to both. But this doesn't hide the weakness of both with mass merchants selling more and more tech, downloads, direct to consumer, and so on and so on.

In my opinion, they will die alone or together, doesn't much matter. The consumer has moved on.

2008 Apr 16 10:46 AM

[brewer:]

There is no way this will ever work out. Who's products are you going to sell? Microsoft's? No one else is having any success in selling mediacenter PCs, which is about all they offer. There are some set top devices I suppose they could try to sell, but there again, they aren't selling well anywhere else.

It's ludicrous to say that you can be like Apple. Drop out of college and start building your own PC first, then develop the next user interface that will be in place for 20+ years, then invent a ground breaking audio device and phone, and you will be getting close. Better get started...

2008 Apr 16 04:38 PM

[SPECTRAMAN 2:]

You just don't get it do ya! Obviously There is more than meets your eyes here. There is more than one thing you can do with an IPOD, how many purchasers are going to utilize the Movie service there, compared with the traffic to-this-date in a Blockbuster Store. How many people rent from Netflix compared to the same scenario. And lastly how many people download/stream directly to computers and TV's and other devices......Now imagine that traffic in an all new setting with all of those capabilities wrapped up in one. In an atmosphere that's interesting. It's whatever makes you happy. And right now I am a happy shareholder.

2008 Apr 16 04:53 PM

[Brimco:]

You people seem to forget that there is a market out here that can't afford "Apple Anything". Apple toys is just overpriced junk.

2008 Apr 17 06:32 AM

[Brimco:]

I don't understand why all the blogger's are heaping ridicule on CEO's who are actually trying to do something different to revive their companies and keep them afloat. Would you prefer that they just stood by doing nothing and watched their bussiness die. You people just don't make any sense taking cheap shots at these guys. How many business have you started and ran and how many people do you employ?

2008 Apr 17 06:33 AM

[heirbrande:]

I see the point of the posts that say this is a hair-brained idea. I agree with the last poster though. These are CEOs and they are not going to
sit and let a company go under- well many of them try not to let that happen, but there are a number of bad apples who should be
fired.
However, this can work, but it definitely requires some fundamental changes I believe. I'm sure a lot of people think Circuit City stores are
gloomy, yet Blockbuster stores are brighter and more organized. So Blockbuster's management will need to evolve the look and feel of Circuit City
to look more like Best Buy, which I
think has a lot of shelf appeal and a better layout. Circuit City , in my opinion, doesn't even have a good logo. Omagine giving a friend
directions using either store as a landmark. You can recognize the yellow
and black Best Buy tag a mile away. Not so with CC. "Oh yea look for the sign with the Circuit City writing" as opposed to "look for yellow and
black Best Buy tag". This change will cost money that they do not have now, so if the deal goes through, which I
suspect it will sooner or later with the state of the economy like it is (hostile takeover coming?), there will be a big lag time in revamping
Circuit City stores.

More importantly, Blockbuster will need to make its TotalAccess service more like Netflix. It needs : (please see my website for the rest of my opinion-- trying to save rambling space on SA's server :-P )

2008 Apr 17 10:40 AM

[User 170287:]

I agree that they are better off merging. The combined business will boost the profits. A good competetion to NFLX. CC stock will soar, the same way BBI.

2008 Apr 17 01:06 PM

[dgwife42:]

im an insider in the blockbuster side, and i see keyes' moves as game changing. What he was refering to[my interpretation] is the way they utilize their space. Apple stores make oooodles of dollars per square foot, where as even radio shack beats bb at loast measure. Jim has taken on maximizing the potential of the bricks and mortar by letting employees innovate, providing a larger product assortment, getting revshare agreements with gaming companies and staying ahead of trends. You can see from the preliminary Q1 results that something is different, and the Ideas that back that up are jim's, i trust that he can make this work and use it to Continue the upward climb that we have allready started.

2008 Apr 18 02:30 PM