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  • Blockbuster, Down But Not Out - (NYSE: BBI) 2 comments
    Apr 7, 2010 3:41 PM | about stocks: BBI

    Blockbuster Inc. (NYSE: BBI) today announced new agreements with Twentieth Century Fox Home Entertainment and Sony Pictures Home Entertainment. These new agreements, along with the previously-announced agreement with Warner Home Video, will provide day-and-date availability of movies for Blockbuster's store and by-mail channels. Additionally, these studios will provide new enhanced payment terms to Blockbuster in exchange for a first lien on Blockbuster Canada Co.'s assets. Blockbuster Canada will continue with business as usual by providing high-quality home entertainment to its customers.

    Blockbuster needs all the help they can get; they are struggling mightily to compete with more convenient alternatives such as Netflix and On-Demand. The new agreements with important, leading movie studios will give Blockbuster a steady supply of top-rated movies. This affirms the company’s strong and collaborative business relations with these critical vendors.
    The new payment terms that are part of the agreement will help Blockbuster continue the recapitalization initiatives already underway. Additionally, Blockbuster has implemented a plan that cuts operating costs by $200 million this year to preserve cash and further improve liquidity.
    Moving forward Blockbuster needs to continue to innovate and make renting movies as convenient and cost effective as its competition. The company now has BLOCKBUSTER On Demand for select Samsung 2010 Blu-ray Players, HDTV’s and Blu-ray Home Theater Systems. It also recently added On Demand for certain smart phones like T-Mobile’s HTC HD2.
    It will be hard for Blockbuster to survive in today’s “instant gratification” society but at least they are making moves which could potentially facilitate a shift back towards profitability. The stock is up over 23% on today's news.

    Disclosure: no position
    Stocks: BBI
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Comments (2)
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  • billddrummer
    , contributor
    Comments (1761) | Send Message
    Does BBI have another rabbit it can pull out of its hat?


    The company is still bleeding cash every month.


    One wonders if a debt restructuring deal would get any traction with bondholders.


    If that fails, I think the prognosis is still bleak.
    7 Apr 2010, 06:29 PM Reply Like
  • joey554
    , contributor
    Comments (605) | Send Message
    The studios will ensure Blockbuster comes back because it helps the whole industry.
    8 Apr 2010, 11:32 AM Reply Like
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