Blockbuster Entertainment, a division of media colossus Viacom Inc., will massively expand its Australasian video rental operations and boost its music interests as part of a plan to become the region’s leading entertainment retailer.
Under the stewardship of Blockbuster’s Asia-Pacific VP John Mlynski, the group plans a further 200 superstores Down Under at a cost of $A100 million ($74 million) by 1998, which will see Blockbuster move into the states of Queensland and Western Australia. Japan will gain 50 more stores, while Thailand, Singapore, Korea, Taiwan and Hong Kong also are targeted for growth. It is believed these markets could host up to 600 stores each.
Blockbuster has about 5,300 retail stores globally.
The unveiling of its aggressive expansion plans comes after the promotion of chief financial officer Daryl Mc-Cormack to the new position of Australia and New Zealand managing director.
In Australia, Blockbuster is faced with stiff competition from several video chains such as Civic Video and Video Ezy as well as emerging pay TV operators who are heavily promoting their movie channels. The rest of the Asian region tends to have a fragmented market of individual stores rather than national chains.
Mlynski told Aussie newspapers that Blockbuster aims to become “the McDonald’s” of video rental and become synonymous with video rental in the region.
The regional push will be promoted and marketed by Blockbuster’s newly appointed ad agency, J. Walter Thompson (Melbourne), and its web of offices in the region. JWT will stage some kind of a game in which Blockbuster customers in various countries compete in state, national and international heats.
JWT also will launch the ad campaign for a new chain of music stores. This follows Blockbuster’s buy-out of 49% of the Virgin retail group it did not already own and the disbanding of the Blockbuster/Virgin joint venture in the U.S.
Blockbuster will fork out an additional $74 million setting up 100 music megastores in the fragmented music market Down Under when its rights to use the Virgin Megastore brand expires in June.
The strategy for both the video and music expansion will be the development of standalone sites with parking, a huge product selection of more than 50,000 items and long operating hours.