Blockbuster admires Netflix, but doesn’t plan to quit

Blockbuster CEO Jim Keyes recently spoke with FastCompany about the company’s current issues, strong points, and long-term business goals.  Also in the interview, Keyes describes why he admires Netflix but still thinks the economy is a culprit in the company’s struggles.

“I admire what they’ve built.  It was a brilliant idea to do DVDs by mail.  We emulated that and created a comparable system.”

Blockbuster admires Netflix, but doesn't plan to quit

In early April, Blockbuster began flaunting its distribution advantages over Netflix and Redbox.  Later in the month, Redbox announced it agreed to delay new releases from Universal and Fox.

“Call me brash, but we’re building a world-class cross-channel distribution platform.  Netflix can’t deliver content the way we can.  Redbox can’t do what we do in their vending machines.”

Despite the continued struggles, I have to admit the company has done a couple of things right — and these positive points could help if the company is able to pull through.  For example, Netflix and Redbox are unable to rent many new release movies until a 28-day sales window passes, while Blockbuster has direct ability to rent those same movies.

The new movies Netflix and Redbox don’t have direct access to, such as Avatar, are available in Blockbuster stores, by mail, and online.  Analysts say it currently isn’t making a difference, but it could have a major impact later down the road.

Oddly, Keyes deflects the root cause of his company’s financial problems and blames it on the sluggish economy, not Redbox and Netflix.  I’d say it’s a combination of the three, but don’t honestly buy the excuse that it’s more the economy than anything else.  If by blaming the economy he means Blockbuster is too expensive compared to rivals, then yes, I guess the economy is partly to blame.

We reported last month that Blockbuster is burning through cash at an “alarming rate,” with more and more people speculating that the company may fold in the near future.