DALLAS -- Blockbuster Entertainment is "fixed," proclaimed Sumner Redstone, chairman of Viacom, New York, parent of the video specialty store giant, in national press reports.
Redstone's comments came after first-quarter financial statements that showed a dramatic upturn in Blockbuster's business. Same-store video revenues increased 9.3% in that quarter, compared with a 4.5% decline for the same period a year ago, noted John Antioco, Blockbuster's chief executive officer.
Rental transactions were up 11% in the quarter after being down 9% a year ago. Antioco attributed this to the retailer's move to a revenue-sharing approach with the studios and through pay-per-transaction supplier Rentrak Corp., Portland, Ore. He predicted that 80% of the chain's buying will be through the shared-transaction fee approach by the end of the year.
"I'm very optimistic about the balance of the year. We will be able to maintain some pretty significant revenue growth," he said.
The company has a goal of obtaining 40% of the video-rental market within five years, he said.
Meanwhile, Antioco also said the chain will roll out a DVD program to 1,000 stores within two months.
Redstone also hinted that some kind of change in ownership of Blockbuster may be in the works. "No matter how strong a growth engine we make Blockbuster, it will never be reflected in the value of Viacom stock as long as it remains in the company," he said. If there is a move, it would likely take place within 12 to 18 months, he said.
