Blockbuster Tests Business Model in Reno

By: Anne Cutler Email
By: Anne Cutler Email
Blockbuster Video is testing it

An employee walks into a Blockbuster store, Monday, April 14, 2008, in Dallas. Blockbuster Inc. said Monday it has offered to pay more than $1 billion for struggling Circuit City Stores Inc., but the nation's second biggest consumer electronics chain questioned whether the movie-rental company can finance the deal. (AP Photo/Matt Slocum)

From gourmet coffee to video games to big screens, this isn't your parents video rental store. If you drop by to rent a flick at the neighborhood Blockbuster Video, CEO Jim Keyes says things might look a little different.

Keyes tells KOLO 8 News Now that Blockbuster had gotten into a niche of video, but is now expanding into a full entertainment store. The new model includes food and beverages, electronics, and entertainment, along with the traditional video and game rentals. The new concept is called Blockbuster Media.

The new business model is being tested in Reno, and Chuck Alvey, the CEO of EDAWN, says this is an ideal location. "It's the combination of our tax structure, our business structure, the quality of our workforce, the even climate, the balance of life. There are a lot of qualities, including predictability of business consistency."

Blockbuster hopes that predictiability will be a sign of success. The company has struggled to keep up with an evolving industry. Companies like Net-Flix, Red Box and Best Buy have undermined their bottom line. Once an industry giant, Blockbuster Video lost more than 85 million dollars last fiscal year.

The success of this new plan will depend on how Reno responds. Jim Keyes says, "We're hoping between 3 to 6 months we'll get a good read and then hopefully you'll see this go nationwide with Reno being the first and most important market for us."

According to Chuck Alvey, "There's an independent spirit about Greater Reno-Tahoe. People like to be on the cutting edge. So, i think people will experiment and if they've done they're homework, I bet people will like it."

Whether this concept works out or not, it's a sure sign that video rental stores as we know them are slowling becoming a thing of the past.

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