Blockbuster Revenue Dips 21 Percent

To suggest that Blockbuster is going bust would be in error: The storied and once-ubiquitous DVD chain enjoyed revenue of more than $910 million during the third-quarter of this year, according to the Los Angeles Times.

Trouble is, that third-quarter figure represents a precipitous 21 percent drop from the $1.1 billion in revenues that were recorded for the third quarter of 2008, a time when the depths of the Great Recession were first being probed and Blockbuster was announcing drastic plans to restore itself to fiscal health. A year later, Blockbuster stock trades below $1 a share, a signal to wary investors that the company may still not have found a safe way out of the recessionary woods.

Blockbuster is caught in the equivalent of a negative feedback loop. Saddled with debt, it isn't really flush enough to battle its competition effectively, especially when it comes to alternative business models like DVD vending machines or the ever-popular TiVo or other devices. Last year, CEO Jim Keyes had little choice but to slash inventories and, more important, to announce the closing of more than 1,000 stories by year-end 2010. Already this year, more than 300 stores have shuttered.

But with fewer retail outlets and a shrinking inventory of even some of the biggest-hit DVDs -- not to mention a slow-down in video-game sales -- once-loyal Blockbuster customers are beginning to look elsewhere for filmic fixes.

Still, one shouldn't discount that Blockbuster's business will go gangbusters again soon. The Times quoted Keyes is very upbeat, aiming to be "expanding product assortment, increasing advertising and reaching out to our customers in new and exciting ways." If they're successful, it'll be a blockbuster achievement.