FORT LAUDERDALE, Fla. — Despite a rosy corporate portrait offered by Blockbuster Entertainment Corp. to its shareholders at the company’s annual meeting Wednesday, one theme did not ring too distant from last year’s counterattack against short sellers.
Chairman H. Wayne Huizenga fingered concern over the company’s lackluster stock performance early in the presentation, claiming that the media and industry analysts have kept “a technological cloud over our stock.”
The cloud represents the belief that Blockbuster is destined to be surpassed by new forms of entertainment technology.
Despite the perception, the rousing meeting sent Blockbuster’s shares up 5/8 to $ 18.50, as one of the most active stocks on the New York Exchange.
Huizenga and president Steve Berrard pointed to recent acquisitions — and especially a new partnership with IBM — to assert that the company will be on the front lines of distribution and retail in years ahead (Daily Variety, May 11 ).
IBM is developing the hardware that will allow Blockbuster, through master digital records at its Soundsational Inc. subsid, to produce both a music disc and its packaging at the point of sale.
A particular album that is not in the store’s stock may be ordered by a customer at a sales kiosk. Computer downloads from the mainframe’s selection of more than 80,000 titles will ensure the sale via the on-site “manufacture.”
That news topped a corporate summary that stressed Blockbuster’s push into music retailing and the future of megastores through its joint venture with Virgin Retail Group.
Huizenga and Berrard also used the meeting to continue debunking concerns that pay-per-view will eventually overtake the video giant. Instead, they predicted that the past year’s expansion and diversification will pave the way for the company’s officially adopted role as a global entertainment conglomerate — with its roots still in the Hollywood film industry.
“Blockbuster has a fundamental tie to Hollywood, where the entertainment industry begins,” Huizenga said. He rehashed the belief that “the cable television monopoly works to our advantage … the film studios don’t want to lose control of their distribution and wind up working for cable.”
Huizenga deflected a question regarding the company’s plans surrounding professional sports franchises. He described the Florida Panthers hockey franchise as “software” for the company’s development of a new sports-and-entertainment villages surrounding arenas and stadiums, which the board has given approval to.
Now with an interest in the Spelling Entertainment Group, Blockbuster has arranged for the broadcast of some Florida Marlins games in Mexico beginning this summer, and possibly throughout South America in the future. But company officials still maintain they have no firm plans for cable or superstation sports tie-ins.
Short-term projections for 1993 included expansion of total video outlets from the current 3,170 to at least 3,400 and possible expansion from 15% to 20% of the video rental market.
Berrard predicted total revenues of $ 3.7 billion in the next 12 months –$ 2 .5 billion from video, $ 700 million from music through the company’s new partners, and the remainder through its production, theme park and other sources.
Marketing beginning this summer will include a new TV spot campaign and a broad series of special-event advertising, such as a repeat of the MTV Movie Awards’ Show sponsorship, and a live Fox TV broadcast of Paul McCartney’s New World Tour performance.
Huizenga got his biggest applause when he announced that, earlier in the day, the board had voted “to increase shareholders’ annual dividends 25%, from 8 cents to 10 cents quarterly per share.”
And when he admitted that the annual meeting should move from its current site, a 1,200-seat legit theater packed with more than 1,400 attendees, the crowd told him to take the assembly to Joe Robbie Stadium.