Co. looks to improve revenue-sharing terms
Blockbuster CEO Jim Keyes stepped up his efforts to get movie studios and vidgame publishers to improve revenue-sharing terms with the chain, saying Wednesday that since the vidtailer spends $1 billion annually with the studios, it ought to get a better deal.Speaking at the Telsey Advisory Group’s inaugural Consumer Conference in New York, Keyes said Blockbuster pays about $18 per movie title in intellectual-property costs and as much as $50 per game title, compared with about $1 in physical costs. “We bring $1 billion in revenue to the studios,” Keyes said. “We’re an important channel to them.” His aim is to help the largest U.S. movie-rental chain fulfill its goal of boosting in-store revenue by having more high-demand titles in stock. Blockbuster last year increased its same-store sales for the first time in the eight years it has disclosed such figures as a public company. The lift was largely due to boosted rental rates per customer, which it upped by improving its in-store stock of high-demand DVD titles. The company increased its Saturday night in-stock rate of new titles to more than 60% from about 20% last year, Keyes said. Keyes also said the chain would delay its planned rollout of its remodeled “Rock the Block” stores to “thousands” of U.S. locations in order to cut capital expenditure. Keyes also reiterated that the company is looking to raise cash by selling stores overseas to potential partners such as telecom and satellite-TV companies, which would then be able to license Blockbuster’s name to generate bricks-and-mortar sales. Last month Blockbuster said it would try to cut costs for at least the early part of this year on items such as retail inventory and capital expenditures in order to reduce its debt by about $100 million. By making the necessary cost cuts to reduce debt, Blockbuster will be able to comply with a refinancing agreement expected to be finalized within the next few days with JPMorgan Chase and other lenders that extends the due date of about $250 million in debt from August this year to September 2010.