Whenever shifts in technology and consumer behavior seem to threaten its core business, the longtime king of movie rentals still manages to stay afloat. Here’s how.
Blockbuster Inc. is like a slasher-flick villain that just won’t die. In spite of what appear to be deep and devastating blows to its business - the rise of Netflix and mail-order movie rentals, in-home use of DVRs and video-on-demand via cable, and Apple’s recent introduction of online film rentals - Blockbuster adapts and lumbers onward.
Part of that adaptation was evident this morning, when Blockbuster (BBI, Fortune 500) announced that its fourth quarter profit grew nearly 360 percent, thanks to aggressive cost cutting and the repositioning of some of its subscription offerings.
The movie rental and retail company’s quarterly earnings grew from $8.3 million (or 4 cents per share) in the last three months of its 2006 fiscal year to $38.1 million (or 18 cents per share) in the quarter just ended. The company said revenue increased 4 percent compared to the same period a year ago, to $1.44 billion.
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