Hollywood Hunter

For a chain store such as Blockbuster that mainly engages in video tape rental, the most expensive part of the cost is related to the storage and logistics of the video tape. The purchase price of a box of video tapes for rental may only cost 15 US dollars, but the cost of storage and logistics during the operation cycle is as high as 50 to 60 US dollars.

In order to speed up the turnover of video tapes among users as much as possible so as to reduce the purchase quantity of video tapes and the pressure of warehousing and logistics, and at the same time to obtain more benefits, Blockbuster launched a late payment system.

The video tapes rented by users usually have 7 days of use time. After 7 days, they will start to pay daily late fees.

In the original timeline, Netflix repeatedly attacked Blockbuster. It was the late fee system that this chain of video tape stores abhorred consumers. For this reason, he also fabricated a founder who paid $40 for a box of "Apollo 13". The late fee resulted in the creation of Netflix's story.

In fact, this story is completely fabricated, and Blockbuster almost even sued Netflix for it. For Netflix, the effect is very good.

Because late fees are indeed a weakness for Blockbuster.

After he became a shareholder and took control of Blockbuster, Simon reminded Nancy Brill and Blockbuster’s management to pay attention to the issue of late fees.

However, in the early stages of Blockbuster’s development, late payment fees did play a very effective role. Therefore, this system has been implemented.

However, with the increasingly fierce competition in the North American video tape industry, Blockbuster’s late fee system has become increasingly outdated.

"In the past few months, I have done various experiments to cancel late fees in three cities on the east and west coasts. The results show that after the cancellation of late fees, the frequency of users renting video tapes has increased significantly. The revenue of chain stores has not decreased, but increased. of."

The Blockbuster executives on the stage were still introducing Blockbuster Online, and off the stage, Nancy Brill whispered to Simon about it.

Blockbuster’s second-quarter financial report has not yet been released, but Simon knows that in the first quarter of 1992, Blockbuster’s total revenue of 730 million US dollars, 61 million US dollars of revenue came from late fees. This part Revenue accounts for 8% of total revenue.

In my memory, Blockbuster’s late fee income exceeded 10% of its total revenue. Such a “rich” income was almost equivalent to Blockbuster’s annual net profit. This also led to Blockbuster’s Before bankruptcy, the videotape chain giant failed to completely abolish the late fee system.

Even people who don't know how to run a company at all can probably understand that a company that relies on fines to support its revenue is absolutely abnormal.

Blockbuster can of course understand this, but the company on the original timeline was too big to last, and at the same time it lacked a strong shareholder, which eventually led to hesitating on many strategies that should be changed, not only failed to give up completely from beginning to end. In fact, the late fee system is full of negative effects on enterprises. Under the general trend of physical leasing to online leasing, Blockbuster has instead drove a big reversal and completely cut off the online leasing business that had been done. The world's largest video tape chain company disappeared.

Simon thought about this and asked Nancy: "Have you discussed this on the Blockbuster board?"

Nancy nodded and said: "Many people have concerns, and there is also the problem of franchise chain stores. Self-operated stores are not a big deal. Franchising stores may be even more reluctant to give up late fees. We cannot expect these franchisees to have too long. Eyes."

Among Blockbuster's more than 4,300 chain stores, a total of about 20% are franchised chains.

This ratio is also much lower than that of Blockbuster in Simon's memory.

After completely controlling Blockbuster, with Simon’s support, an important move taken by the management is to gradually abolish the franchise system and only develop self-operated stores. This is also the fact that Blockbuster’s current number of stores is far lower. Reasons on the original timeline.

However, for chain stores that have already joined, Blockbuster cannot immediately cancel the other party's qualification to join.

Moreover, these franchised stores have much higher operating freedom than self-operated stores.

For example, Blockbuster Headquarters made the decision to cancel the late fee, and these franchised stores do not necessarily have to comply.

"If you can guarantee that your experimental data is okay, then go ahead and implement it." Simon thought for a moment, and said: "The board of directors and shareholders, I will help you with it. In terms of franchising, you need to solve it yourself. However, I suggest you better not do it overnight and carefully consider a set of reasonable plans."

Nancy nodded and said, "I intend to use this opportunity to further expand Blockbuster’s membership system. In addition, I hope to be able to distinguish Blockbuster’s franchise stores from self-operated stores, such as being prominent in franchise stores. The location adds the label of'Franchise' to distinguish it from self-operated stores. After all, this time Blockbuster Online, franchise stores are also not participating.

Blockbuster online plans and blockbuster physical stores are gradually merging. If franchise stores are also included in this system, problems in the distribution of benefits will inevitably arise.

"So, if you do this, how do you deal with the dissatisfaction of the franchise stores?"

"I intend to give them a higher degree of management freedom, while appropriately reducing the franchise fee."

Simon smiled and said, "Do you want to strip out these shops directly?"

Nancy's delicate face was a bit helpless: "Yes, but it's too difficult."

The divestiture of franchise stores is like canceling late fees, which is equivalent to giving up a large amount of market share and the company's receivables. This must have a serious impact on Blockbuster's stock price.

The two had been whispering about Blockbuster’s cancellation of the late fee throughout the press conference, knowing that Nancy had been with Simon at the end of the press conference, chatting about various issues.

Nancy's "entanglement" inevitably made the female assistant who followed Simon a certain instinctive vigilance. Even Nancy saw the look of wanting to follow Simon's side but worrying about being rejected.

Simon finally sent the female assistant to chat with Claire, the C girl who was also here today, and then looked at Nancy with a joke on her face: "Is it fun to do this?"

Nancy tilted her face up, with a slightly mischievous smile at the corner of her mouth: "Very interesting."

"Be careful that Jenny puts on you small shoes in the future. You know, men's ears are very soft. She said bad things about you several times in front of me, maybe you will lose your job."

Nancy said, "Are you someone who is easily influenced by women?"

Simon nodded seriously and said, "Yes, the more beautiful a woman is, the more I can't hold it."

Nancy was choked, then rolled her eyes and said, "So, I'm pretty sure Jenny won't do that."

"why?"

"Since you know that you are easily influenced by women, you will definitely not choose the kind of woman who likes to influence and manipulate you by your side."

Simon thought for a moment, took a sip of the red wine, and said, "It seems, it makes sense."

Nancy took another step, seemingly intending to continue her efforts: "So, I guess, you are actually very wary of women?"

Simon lowered his head and looked at the little senior executive in front of him, ignoring her argument just now, but said: "You have broken through the comfortable distance between me and people."

"Are you feeling sick?"

"No," Simon's tone turned dangerous, and said faintly: "You gave me the desire to hunt."

Nancy and Simon looked at each other, but after less than a second, they still stepped back slightly.

The housekeeper happened to come over to say hello, which was a break from this little embarrassment that had just brewed.

"What are you talking about?"

"Blockbuster late fees."

Simon said, his eyes did not shy away from admiring Alice's capable and elegant appearance in a white professional suit.

After the last night, although they had seen it several times, they never found a chance to be intimate.

On the one hand, Simon is indeed a more restrained person, on the other hand, there are not many women around, but he can basically watch Simon. For example, when coming to San Francisco, the female assistant would not give Simon any chance of stealing food. If Janet is in Los Angeles, Simon rarely stays overnight.

Simon's eyes fell on her body, and Alice inexplicably remembered the situation when the man stroked him with a big hand slightly and roughly on him that night. She couldn't help but turned her attention to Nancy and said: "Speaking of, Nan Hope, have you considered the thing I told you about?"

Nancy turned his gaze between Simon and Alice, nodded, and said, "I have considered it, but although I also think this is feasible, if we do this, we will face a class action lawsuit from shareholders. Up."

Simon stood by, heard the two women say this, and asked, "Is there anything I don't know?"

Nancy glanced at Simon and said, "Alice wants Blockbuster to cancel its video tape sales business online."

Simon understood immediately.

The development of Amazon online store in the past six months can be described as rapid. Therefore, in addition to books, the increase in product categories is also an example. In addition to books, the most suitable type of online sales at this stage is definitely included in videotapes.

The housekeeper probably hopes that Blockbuster will cancel the sales of video tapes online to avoid competition with the business planned by Amazon.com. Of course, there should be a corresponding exchange of benefits. Amazon can't just let Blockbuster cancel this part of the business.

Although the operating focus of Blockbuster chain stores is video tape rental, they have always been involved in the video tape retail business.

Simon looked at Nancy and asked, "What do you think?"

"I think this is a good suggestion," Nancy said honestly: "With the cancellation of online retail, Blockbuster and Amazon can conduct mutual promotion and cooperation to guide user groups, and Blockbuster can also reduce a large part of retail business expenses. In fact, Simon, I even want to cancel the retail business of physical chain stores so that Blockbuster can focus more on leasing. It just doesn’t work at all."

Late fees may only account for 8% of Blockbuster’s revenue, but the proportion of video tape retail revenue accounts for more than 20% of Blockbuster’s total revenue, which is indeed impossible to cut.

As for Blockbuster Online, this website has just opened, and the future of online retail is technically uncertain, and cancellation does not seem to matter.

It's just that if you really do this, other shareholders of Blockbuster will definitely be dissatisfied. For the benefit of another company in the Westeros system, it will harm the interests of Blockbuster shareholders. Therefore, other Blockbuster shareholders are likely to file a class action lawsuit.

Running a company, especially a listed company of this kind, often fails to make the most correct decision. This is the key.

In the final analysis, it was because Simon failed to completely buy Blockbuster.

If a 100% shareholding is achieved, then of course the boss can do what he wants.

Nancy quickly said again: "However, in addition to canceling the late fee, I am also considering cutting off some of Blockbuster's corner businesses such as movie sales."

Simon smiled and said, "This part of the business was originally proposed by you."

"Yes," Nancy said without denying, "However, after recalculating the cost and return ratio of this part of the business in recent quarters, I think it's best to cut it off and return to the core video tape retail. It can save a large part of human resources and make it easier for Blockbuster to manage and expand further."

After Nancy finished speaking, she glanced at Simon with interest, even with a hint of whether you would ask me or not. Blockbuster’s peripheral product retail mainly sells film and television peripheral products related to Daenerys Entertainment.

Simon wanted to squeeze Nancy’s delicate face: ah, do you remember who your boss is?

Of course it is impossible to do this at a cocktail party in full view.

Nancy was aware of something, she instinctively shrank her neck, and then looked over unwillingly, as if you were able to pinch and pinch, you pinch and feel confident.

Of course Simon would not really do such abrupt things, saying: "As long as you think the appropriate decision, you can do it. However, Nancy, the consequences of the matter also need you to bear. Also, don't forget, You are more of the group president of Daenerys Entertainment responsible for the consumer products business."

Nancy paused, and completely dispelled some of the careful thoughts just now, and solemnly said: "I will consider this matter very seriously."

The little senior executive suddenly understood.

Peripheral product sales, for Blockbuster, the investment and return ratio may not be too high, and it will increase the manpower, procurement and logistics costs of the chain store. However, this can significantly increase Daenerys Entertainment’s peripheral product revenue.

Blockbuster may have a low profit margin in the sales of peripheral products, but Daenerys Entertainment can obtain very high profits.

Nancy has focused too much energy on Blockbuster in recent months, and it is inevitable that she has neglected her job. In fact, she just talked about this matter, and it was just an immature idea after analyzing Blockbuster's financial reports in recent quarters.

If she considers it carefully, she will definitely not put it forward rashly.

Women are always easy to get angry, and under a faint shame, Nancy felt that it must be the guy in front of her that made herself have some little emotions of confrontation.

Yes, it must be so.

Obviously he was right.