The pilot program is an offshoot of its buy online, pick up in store option. The retailer also named three Nordstrom brothers as co-presidents.
The promising start of Blockbuster Online has prompted the company to spend an additional $70 million this year to grow the subscriber base. The site has attracted 750,000 subscribers since August and is shooting for 2 million in a year.
Blockbuster Inc. will spend an additional $70 million this year to accelerate the growth of the subscriber base for Blockbuster Online, John Antioco, Blockbuster chief executive officer, told analysts today during a conference call to discuss fourth-quarter earnings.
For the full year, operating costs for Blockbuster Online are expected to total $120 million. “While this will increase our online costs in the short term … we believe the additional investment will dramatically ramp up our subscriber base, with our goal to have in excess of 2 million subscribers by the end of the first quarter of 2006,” Antioco said. Blockbuster has signed 750,000 subscribers since launching the web site in August.
The additional money invested in Blockbuster Online will be offset by cost cuts in other areas, he said. Blockbuster reported a net loss last year of $1.26 billion, compared with a net loss of $983.9 million a year earlier on revenues of $6.05 billion, up 2.4% from $5.91 billion a year earlier. For the fourth quarter, net income totaled $900,000, compared with a net loss of $1.19 million in 2003’s fourth quarter. Total revenues increased 6.2% to $1.72 billion in the fourth quarter from $1.62 billion in the year earlier period.