Final power point presentation stating the decline of video rental companies due to technology changes.

1. Blockbuster and New Media How Technology and New Media have Changed the Way Blockbuster Does Business IMC 498-24: Entertainment Marketing Monday, November 16, 2009 Stephen Davis and Melissa Lopardo

2. Blockbuster’s Competition On-Demand iTunes Netflix Redbox (kiosk) Mom-&-Pop video stores

4. Divesting its Foreign Operations

5. Renew Focus on North American Business and Digital FutureSource: AOL Finance, Blockbuster INC Profile http://finance.aol.com/company/blockbuster-inc-class-a/bbi/nys/overview

9. No late feesSource: Chicago Tribune

10. Netflix Plan “We named the company Netflix, not DVD’s by Mail, because we knew we would eventually deliver movies over the Internet. DVD’s will be around for a long time, but we are building for the day they are not.” – Reed Hastings, CEO, NFLX

12. Spends $600 million per year at USPS

13. Has patent on business model which reduces imitation by competitors

14. As broadband becomes more prevalent and cost of set-top boxes decreases, VOD is expected to gain ground in entertainment marketSource: Forbes Magazine

15. Netflix Focus 2009Exclusively on subscription segment ofinternet delivered contentsource Netflix Annual Report BlockBuster Focus 2009 Online subscribers deals with free in-store rentals Rewards program to enhance customer loyalty towards stores Source Blockbuster Annual Report

16. BlockBuster FutureTent-Pole-Title Program A major focus is bringing customers more copies of big box office titles to rent or to buy and is supported with marketing message in the store. Example- Indiana Jones-themed car Marco Andretti drove in Indy 500. Show car was featured at local events at BB stores before hitting track at Indy 500 in May 2008 Soucre Blockbuster Annual Report

17. NETFLIX FUTURE Some movies streamed instantly: • Instantly watch online on your PC or Mac • Instantly watch right on your TV via a Netflix ready device. • Choose from a growing library of movies & TV episodes. As a bonus to your DVDs by mail, some movies streaming to your TV over the Internet! Source Netflix Press Kit

18. Blockbuster Operations Stores- Domestic stores generally open 365 days a year, with daily hours 10 am-10pm. As of Jan. 2009 4,585 stores in U.S. Mail- offer 90 thousand movie titles, no due dates and option of video-game rentals beginning in 2009 Vending- used to expand physical distribution of media entertainment, continue to test solutions to offer convenience to customers

19. BlockBuster Digital Delivery Movielink, LLC- offered on Blockbuster website, movie downloading business with one of the largest libraries of digital content for both rental and sale. Allows for capitalizing on film downloading market and additional choices for customer needs.

20. Reed Hastings-Netflix CEO Never underestimate the competition: We erroneously concluded that Blockbuster (BBI, Fortune 500) probably wasn't going to launch a competitive effort when they hadn't by 2003. Then, in 2004, they did. We thought, well, they won't put much money behind it. Over the past four years they've invested more than $500 million against us. Source : Forbes Magazine Jan. 2009

21. BBI StockHIGH 2002 $28.60LOW 2009 .82

22. NFLX- MOST RECENT STOCK PRICE $59.33 /last Friday

23. PARTNERSHIPS 2009 NFLX & MICROSOFT MICROSOFT AND SONY BEGAN OFFERING XBOX CONSOLE OWNERS VIDEO-WATCHING SERVICES– THROUGH A PARTNERSHIP WITH NETFLIX SONY, WITH THE PS3, BEGAN OFFERING ACCESS TO NETFLIX BBI & SONIC SOLUTIONS Provides “know how” to bring movie downloads and rental services to devices and to extend business to media players, set-top boxes and internet ready tv’s