Blockbuster’s new kid on the block

Blockbuster was rescued out of administration last month, and its new owner wants to turn the rental giant into a retail powerhouse. MCV speaks to the firm’s new MD Gary Warren

Why was Blockbuster worth saving in the UK?

There is an opportunity here. The business is predominantly rental, with some retail. I was out at stores at the weekend and there was just a constant stream of renters. They were renting up to four movies, they were buying popcorn and cola. It is how people want to consume movies and we should be at the forefront delivering that offer.

That said, we can see physical rental is in decline and there is a shift to digital rental. But we are also a retailer. And in that sense, it is still very early days.

Blockbuster’s strategy has meant there’s been protection around rental. We need to maintain the rental stronghold that we have, but grow our retail position. Entertainment was a 4bn business last year in the UK market, and we feel we, and our 264 stores, have a part to play in that.

What went wrong with Blockbuster do you think?

It was a combination of things, not least a very tough economic environment. But certainly the store estate was a mixture of high performing and lesser performing stores. Also realising the opportunity to develop retail at Blockbuster wasn’t there. Rental and retail is two separate animals. Blockbuster is without doubt the leader when it comes to rental. But there’s less understanding of retail. Now with myself coming onboard, I bring 25 years of retail experience, predominantly from entertainment. Hopefully I can mentor the business and the individuals within it.

You said in a press release that you’re looking at new categories. What areas in particular?

It’s entertainment. We can’t bring complexity to what we do. We’re not a huge business. We are lean and mean. So we need a simple approach. Music is on the agenda. Is it a specialist music offer? Not really. It’s recognising that there’s a deflated HMV estate. And looking at the geography of our stores, we are in locations where Blockbuster is king. There is no GAME. There is no HMV.

Alongside music, there are also books and magazine opportunities. We already dip our toe in the merchandise market at times, particularly around games. One example is with Skylanders. I am conscious that others in the market have had a fantastic time with that brand. Looking ahead, with Disney bringing Infinity to the table and Nintendo reenergising Pokmon, that’s exciting. And it’s absolutely Blockbuster’s place to play with those, particularly franchises and products.

"Games has been our heartland. Last week I
came straight in after the weekend and I was
looking at BioShock, Tiger Woods and Army
of Two. Internally we are over-the-moon with
our performance. We are now much more of
a presence on games. We have momentum.
But we have got to grasp it and get our
suppliers to join that momentum with us."

Blockbuster UK MD, Gary Warren

So games still has a big role to play at Blockbuster?

Games has been our heartland. Last week I came straight in after the weekend and I was looking at BioShock, Tiger Woods and Army of Two. Internally we are over-the-moon with our performance. We are now much more of a presence on games. We have momentum. But we have got to grasp it and get our suppliers to join that momentum with us.

Our games buyer James Morton asked me on my first day: ‘Gary, are we staying in games?’ And I said: ‘no brainer. It’s in our DNA.’ Being around stores I see an opportunity to bring some theatre, certainly in the larger stores. If you think about games, the brands, the excitement and the passion around gaming, we need to bring that to life in the stores. Again, keeping in mind that this will be a simple, low-complex approach to improving the look of the stores.

Last year Blockbuster was trying to engage more with gamers, via the media and reward schemes. Is that a strategy you’re pursuing?

Yes. The VIP Gamer card, our loyalty reward scheme, was strategically switched off during administration. But we’ve quickly turned it back. It is something we want to do more with. Even through administration we have been getting really good pre-orders on games. So linking the VIP card to pre-orders, particularly going into Q4, which feels like the most exciting one for a few years, is something we are doing.

Why should suppliers want to get involved with Blockbuster?

The beauty of Blockbuster is that we are an out-of-hours retailer. We really are unique in our channel. Other retailers come to market with midnight launches and things like that, but in the main they close at 5:30. Whereas we are open much later. So as a potential strategic partner for any activity, I don’t think we have leveraged the voice we have. We need to show our supply partners that we can bring something incremental to the table.

In your press release you also referenced new technologies as part of the Blockbuster strategy. What do you mean by that?

It’s really around new platforms like PS4 and the next Xbox. But as a side element, we are looking at technology products. To be clear, we don’t see ourselves as a specialist technology retailer. We are the convenience outlet for the chargers, the speaker docks, the cases. The sort of things you might lose or break and need replacing.

So console hardware is a focus for the new Blockbuster?

We have a bundle strategy, working with platforms, games and accessories and putting them together. I am passionate about that and we will be looking to up the ante in that regards. Generally we are looking ways of being a key console partner as well as a software partner.

Blockbuster UK’s online presence has been lacking, and you have a ecommerce experience from HMV. Is online an area of focus for you?

It’s not actually lacking, I’d just say that it’s quite secret. We can quickly develop into an omni-channel business. We have very good stores, a very good online offer and a great mobile offer. We have a magazine for the iPad that is fantastic. It can run enriched content and trailers. And for our suppliers we can run bundle coupons, pre-order coupons and so on. It’s a credit to the small team here. But I said when I came in: ‘We need to tell people about this. We really need to stop talking to stores and online separately, join everything up and become a proper omni-channel retailer.’ And everyone has come straight on-board.

"The beauty of Blockbuster is that we are an
out-of-hours retailer. We really are unique in
our channel. Other retailers come to market
with midnight launches and things like that,
but in the main they close at 5:30.
Whereas we are open much later."

Blockbuster UK MD, Gary Warren

What about digital? Is this an area that Dish Network [Blockbuster US’ owner] controls?

Yes but it’s still an opportunity. We own the stores, we own the online store outright, but Dish has got the digital space. Therefore we need to work with them on the future developments in that sense. So it’s not really an issue. But the first priority coming into the business is to review the store estate.

Does the loss of stores on the High Street present an opportunity for Blockbuster?

There’s an opportunity to grab, but at the same time we don’t want to confuse the Blockbuster customer. We don’t want to bring them a rushed, second-rate offer. So everything we do will be strategically planned and as you can see, we are already some way ahead in forming the picture. In other circumstances we may have held off in going to the press and the trade to talk about our plans. But we want to get moving quickly and get people to join us on the journey. We haven’t got all the ideas, so we are still very much open. But we have the strategic tent poles already in the ground and we are moving forward.

What’s your message to the video games industry?

We have an ambition to be much more of a partner to the games industry in the UK and less passive. We want more voice. We want the games industry to know us and to be key to plans. We want our suppliers to feel we have channels that are available to them that they can’t get from our rivals. We are serious about games at Blockbuster.