Question

According to the Blockbuster FY 2004 10K, what change in Blockbuster revenue, net income, liquidity, leverage, turnover, profitability, and/or market value measures are most descriptive Blockbuster’s performance for the period 2003 through 2004? How did the overall market change over that time frame? How has Netflix performed in this time frame? Select the single best available answer from those presented below. Group of answer choices

A) Experienced a massive loss of shareholders' equity; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

B) Maintained a stable dividend; DVD sales increased; experienced their first Net income gains .

C)Experienced a massive loss of shareholders' equity; DVD sales increased; experienced Net income losses.

D) Maintained a stable dividend; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

Answer 1

Answer:The best possible answer in group of answers is:

(d) "Maintianed a stable dividend,consumer spending for in-home movie viewing in the United States;revenue and subscribers have more than tripled."

I choose this answers beacuse it shows their unawareness about current market scenario.There was a time in 2000 when Netflix offer itself for acquisition to Blockbuster Inc but Blockbuster refuse the offer.Same Netflix outplaced them in couple of years.

Only reason behind their failure was lack of agility to know or feel what was going on around them.In 2003 FY, Blockbuster states that "During 2004, we plan to invest signicifantly in new systems and infrastructure to support our new initiatives our rental subscription program,which includes our online rental subscription service;the continued development of our games store-in-store concepts;and continue development and implementation of our movie and games trading model"

Around same period of time,Netflix enjoying their first major success, initiates IPO(initial public offering) successfully.From initial days they understand the importance of technology and internet as they start online DVD rental subscription and in 2004 they reach its 1 million subscription.

Meanwhile,Blockbuster also launched Blockbuster online in order to compete with Netflix.But Netflix always enjoyed first arrivor advantage.Moreover they are more proactive towards change of technology.Later on,they launch streaming video, which changed the game altogether.

Blockbuster did mistake to focus on one area rather than shifting their focus or approach from movie mail order service to online streaming.Blockbuster Inc was too busy in counting money and enjoying their success,never got an idea technology is changing so does people choices.