Blockbuster (ticker: BBI) CEO John Antioco argued that strong Q2 2005 earnings results confirm the success of his company's movie rental strategy. Key extracts from management's earnings results conference call:
....This quarter in the face of store based rental industry that has declined faster than anyone expected, we're showing improvement trends in active members, increased our rental transactions, and largely offset the millions of dollars we gave up in extended viewing fees by providing customers with a better rental proposition.
We have also surpassed the 1 million subscriber mark with Blockbuster Online, adding approximately the same number of net subscribers as our largest online competitor; increased our share of online rental base to 20%; and right on track made significant headway with our efforts to fulfill online rental products from our stores, an advantage that we believe the will be very difficult for competitors to replicate.
We have also continued to make progress with our game concept and movie trade.
In short, we're transforming Blockbuster and offering customers more alternatives. We're diversifying our business, and we're positioning ourselves to take advantage of future growth opportunities -- online rentals, games, trading, and the inevitable consolidation of the store based video rental market.
....Our job through the remainder of this year and going forward is to make sure that Blockbuster is positioned to be the biggest beneficiary of this consolidation….
(Quotes are from the CCBN StreetEvents transcript.)
