Blockbuster to Go Full Throttle with DVD

DVD is finally getting the endorsement it deserves. On Monday, September 27, Blockbuster Video announced an aggressive plan to bring the format to 3800 domestic rental locations and 1000 foreign stores by the end of the year. DVDs currently enjoy shelf space in only 900 of Blockbuster's 6600 outlets.

Blockbuster is the world's top video rental chain. The move will put more than 200 DVD titles in targeted stores, with new films to be added monthly. Although industry observers credit the change to threats posed by the rapid gains of #2 rental chain Hollywood Video—a DVD supporter from the beginning—Blockbuster officials attributed their decision to DVD's rapid penetration of the marketplace. "DVD has far surpassed original projections," said one executive.

More than 4 million American homes are expected to have DVD players by January 1, and that number is expected to grow tenfold within the next seven years. With basic player prices already below $250 and headed for the sub-$200 region, the prediction may be conservative. Almost two-thirds of the US population lives within short driving distance of a Blockbuster store, the company claims.

Blockbuster's big DVD push is part of a larger marketing campaign that will see the company take its sales and rental operation online later this year. A Viacom subsidiary, Blockbuster also plans to launch a stock offering at an unspecified date, presumably after boosting its revenue stream with DVD.