membership transaction database, our real estate database and outside research agencies to formulate and adjust
our marketing and advertising campaigns based on:
•
membership behavior and transaction trends;
•
consumer needs and attitudes;
•
our market share in the relevant market;
•
our financial position;
•
our evaluation of industry trends;
•
local demographics; and
•
other competitive issues.
This enables us to focus our resources in areas that we believe will generate the best return on our
investment.
During 2008, we focused on offering programs that are an alternative to the programs offered by mass
merchant retailers and other online subscription service providers. We continued a tent-pole title strategy in the
stores with both a rent and buy message and also continued to offer our in-store movie and game subscription
services—Total Access In-Store and the BLOCKBUSTER Game Pass®—and our BLOCKBUSTER Rewards®
program. Each of these is discussed below.
•
BLOCKBUSTER Total Access. Online subscribers have the option of exchanging their DVDs through
the mail or returning them to a nearby BLOCKBUSTER store in exchange for free in-store movie
rentals. We offer various priced plans with associated in-store exchange quantity offerings.
•
Tent-Pole Title Program. This in-store program is a major focus bringing customers more copies of big
box office titles to rent or to buy and is supported with a significant marketing message in the store and
in our customer relations management program.
•
BLOCKBUSTER In-Store Total Access and BLOCKBUSTER Game Pass. These in-store programs
allow customers to watch or play an unlimited amount of movies or games (the number of movies or
games allowed out at a time is dependent on the pass the customer selects) for one monthly price and
keep them for whatever period of time that they desire during the term of the pass, subject to certain
limitations.
•
BLOCKBUSTER Rewards. This premium in-store membership program is designed to offer benefits to
our customers and enhance customer loyalty by encouraging our customers to rent movies and games
only from our stores.
In 2008, we sponsored the Indiana Jones-themed car Marco Andretti drove in the Indianapolis 500 race.
Andretti’s show car was featured at local community events at selected BLOCKBUSTER stores across the U.S.
before hitting the track at the Indy 500 on May 25, 2008. The sponsorship and show car tour were both part of a
unique program that brought Indiana Jones into Blockbuster stores nationwide through an in-store merchandising
program that includes exclusive Indiana Jones and merchandise available for sale to the public only at our stores.
Our advertising efforts in 2008 were partially limited by our focus on our cash conservation strategy. We
focused advertising efforts on the in-store marketing of our tent-pole title strategy, growing the games software
and hardware category, new product line introductions and traffic-driving promotions. The studios generally
spend a significant amount on advertising to promote new DVD releases, from which we benefit. We anticipate
that the studios will continue this spending in 2009. In addition, some of our business alliances, including some
of those with the studios, allow us to direct a portion of their home video advertising expenditures. For example,
we often receive cooperative advertising funds from the studios that might be used for direct mail or
point-of-purchase advertising. We expect to continue our cash conservation strategy in 2009, which will maintain
current advertising limitations, and may require additional limitations on advertising commitments.
12