Analysts expect lower Blockbuster Total Access subscribers
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Company also planning in-store subscription program
By Ned Randolph -- Video Business, 10/4/2007
OCT. 4 | After a meeting with Blockbuster CEO James Keyes and chief financial officer Tom Casey, analysts are expecting a reduction in customers to Blockbuster's Total Access online subscription service.
Meanwhile, a spokeswoman said the company is looking at an in-store subscription program.
At the meeting in New York last week to introduce new CFO Casey, analysts heard that Blockbuster has been rolling back advertising spending on Total Access, which some analysts believe will cost the company subscribers in the present quarter.
"They strongly suggested that they cut advertising spending, that churn was constant and that new subscriber adds were much lower, leading us to the conclusion that subscriber growth was negative," Michael Pachter, an analyst with Wedbush Morgan Securities, told a Reuters reporter.
In Blockbuster's last quarterly earnings report in July, Keyes said the retailer would scale back marketing on Total Access, which had accounted for more than $300 million in advertising.
Blockbuster spokeswoman Karen Raskopf said Thursday that Keyes has not said anything new and that he would offer additional guidance at the company’s third-quarter earnings call, which will likely take place in the next month.
“They just had some normal course of business meetings in New York. The new CEO and chief financial officer were introducing themselves to analysts,” she said. “In those meetings, they would not have said anything differently from the second-quarter call from July. Nothing new is being said.”
She said the company remains focused on subscribers, both online and the in-store program.
“We are also looking at a subscription program for in-store customers,” she said.
