Chapter 489: 491

For blockbuster, a chain store mainly engaged in video rental, the most expensive part of the cost is the storage and logistics related costs of video tapes. The purchase price of a rental videotape may only cost US $15, but the cost of warehousing and logistics in its operation cycle is as high as US $50 to US $60.

In order to speed up the turnover of video tapes among users as much as possible, so as to reduce the purchasing quantity of video tapes and the pressure of warehousing and logistics, and at the same time, in order to obtain more revenue, blockbuster launched the late fee system.

Users usually rent videos for 7 days. If the usage time exceeds 7 days, they have to pay the late fee on a daily basis.

On the original time line, Netflix repeatedly attacked blockbuster for the late fee system that the video chain store detested by consumers. For this reason, it also made up the story of a founder who created Netflix by paying $40 late fee for a box of Apollo 13.

In fact, the story was completely made up, and blockbuster even nearly sued Naifei for it. For Nafi, the effect is very good.

Because late fee is really a weakness of blockbuster.

After taking control of blockbuster, Simon reminded Nancy Brill and blockbuster's management to pay attention to late fees.

However, in the early stage of the development of blockbuster, the late fee really played a very effective role. Therefore, this system has been implemented all the time.

However, with the increasingly fierce competition in the North American video industry, blockbuster's late fee system is becoming more and more inappropriate.

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

On stage, blockbuster executives are still introducing blockbuster online. Off stage, Nancy Brill whispers about it to Simon.

The financial report of blockbuster in the second quarter has not yet been released. However, Simon knows that in the first quarter of 1992, blockbuster's overall revenue of $730 million came from late fees, which accounted for 8% of the total revenue.

In my memory, blockbuster's overdue fine income is more than 10% of its total revenue. Such a "rich" income is almost equal to blockbuster's annual net profit. As a result, until blockbuster's bankruptcy, the video chain giant failed to completely eliminate the overdue fine system.

Even people who do not know how to run a company can probably understand that it is absolutely abnormal for a company to rely on fines to support its revenue.

Of course, blockbuster can understand this, but the company on the original time line is too big, and at the same time, it lacks a strong shareholder, which eventually leads to hesitation in many strategies that should be changed. Not only has it failed to completely give up the late fee system, which has a negative impact on the enterprise, but also it has changed from entity leasing to online leasing Under the general trend, blockbuster reversed the trend and completely cut off the online leasing business that it had already done, eventually leading to the disappearance of the world's largest video chain company.

Simon thought about this and asked Nancy, "have you discussed this at the blockbuster board?"

Nancy nodded and said: "many people have concerns. Moreover, there is the problem of franchise stores. Self operated stores are nothing. Franchise stores are more likely to be reluctant to give up late fees. We can't expect these franchise stores to have too long-term vision."

About 20% of blockbuster's more than 4300 chain stores are franchised.

This ratio is also much lower than blockbuster in Simon's memory.

After completely controlling blockbuster at the beginning, with Simon's support, the management made a very important move, that is, gradually abolishing the franchise system and only developing its own stores. This is also the reason why the number of blockbuster's stores is far less than the original time line.

However, for the chain stores that have already joined, blockbuster can not immediately cancel the other party's franchise.

What's more, these franchise stores have a much higher degree of operation freedom than their own stores.

For example, if blockbuster's head office decides to cancel the late fee, these franchise stores don't have to absolutely comply with it.

"If you can make sure that your experimental data are OK, you can implement it directly," Simon thought for a moment. He said, "I'll help you with the board of directors and shareholders. In terms of franchise stores, you need to solve it yourself. However, I suggest you don't do it overnight and carefully consider a reasonable plan. "

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 its own stores, such as adding a "franchise" label in a prominent position of the franchise stores to distinguish it from its own stores. After all, this time blockbuster online, franchise stores are not involved in the same

Blockbuster online plan and blockbuster physical stores are gradually integrated. If franchise stores are also involved in this system, there will inevitably be problems in the distribution of interests."Then, how do you deal with the dissatisfaction of the franchise stores?"

"I'm going to give them more freedom of operation, and at the same time appropriately reduce the joining fee."

Simon said with a smile, "do you want to separate these shops directly?"

Nancy delicate small face with a bit of helplessness: "yes, but it's too difficult."

Divestiture of franchised stores is like the cancellation of late fee, which is equivalent to giving up a large amount of market share and receivables of the company, which must have a serious impact on the stock price of blockbuster.

The two had been whispering about the cancellation of the late fee by blockbuster in the whole conference. At the end of the conference, Nancy was always with Simon, talking about all kinds of problems.

Nancy's "entanglement" inevitably made the female assistant who came with Simon have some instinctive vigilance. Nancy could see that he wanted to follow Simon's steps, but was afraid of being rejected.

Simon finally sent his female assistant to chat with Claire, the same girl who came here today, and then looked at Nancy with a banter on her face: "is it fun to do this?"

Nancy raised her face with a mischievous smile: "it's very interesting."

"Be careful that Jane will wear shoes for you in the future. You know, men's ears are very soft. If she speaks ill of you several times in front of me, maybe you will lose your job."

Nancy said, "are you the kind of person who is easily influenced by women?"

Simon nodded seriously and said, "yes, the more beautiful a woman is, the less I can control her."

Nancy choked, rolled her eyes, and said, "so I'm pretty sure Jennie won't do that."

"Why?"

"Since you know that you are easily influenced by women, you will not choose the kind of women who like to influence and manipulate you."

Simon thought for a moment, took a sip from his glass and said, "it seems reasonable."

Nancy stepped forward again, as if intending to keep up her efforts: "so, I guess you're really wary of women?"

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Simon looked down at the little female executive in front of her, ignoring her remarks, but said: "you have broken through the comfortable distance when I contact people."

"You don't feel well?"

"No," Simon said, turning dangerous. "You make me want to hunt."

Nancy and Simon looked at each other in less than a second, but after all, they stepped back a little.

The housekeeper just came to say hello, which broke the little embarrassment that just started.

"What are you talking about?"

"The late payment of blockbuster."

Simon said, looking at Alice in a white professional suit.

After the last night, although they met several times, they never found a chance to be intimate again.

On the one hand, Simon is indeed a more moderate person. On the other hand, there are not many women around him, but he can basically keep an eye on Simon. For example, when she came to San Francisco, the female assistant would not give Simon any chance to steal food. If Janet is in Los Angeles, Simon rarely stays up at night.

Simon's eyes fell on her, and Alice thought of that night when the man stroked her rudely with a little bit of a big hand. She was a little uncomfortable, so she turned her attention to Nancy and said, "come on, Nancy, have you thought about what I told you?"

Nancy turned her eyes between Simon and Alice, nodded and said, "I've thought about it, but I think it's feasible, but if we do, we'll face a class action lawsuit from shareholders."

Simon stood by and listened to the two women saying, "is there anything I don't know?"

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

Simon understood immediately.

Amazon online mall has developed rapidly in the past six months. Therefore, besides books, it is also an example to increase the types of goods. In addition to books, the most suitable type of online sales at this stage is video.

The housekeeper probably wants blockbuster online to cancel its video sales business and avoid competition with Amazon online mall's planned business. Of course, there should be a corresponding interest exchange. Amazon can't let blockbuster cancel this part of business.

Although the business focus of blockbuster chain store is video rental, it has always been involved in video retail business.

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

"I think it's a good suggestion," Nancy said truthfully, "to cancel online retail, blockbuster and Amazon can promote and cooperate with each other to guide user groups, and blockbuster can also reduce a large part of the retail business expenses. In fact, Simon, I even want to cancel the retail business of physical chain stores in order to make blockbuster more focused on leasing. It's just that it won't work. "Late fees may only account for 8% of blockbuster's revenue, but the proportion of video retail revenue accounts for more than 20% of blockbuster's total revenue, which is really impossible to cut.

As for blockbuster online, the website has just been opened. Strictly speaking, the future of online retail is still uncertain. It seems that it doesn't matter to cancel it.

However, if this is really done, other shareholders of blockbuster will definitely be dissatisfied and damage the interests of shareholders of blockbuster for the sake of another company in the westero system. It can't be justified. As a result, other shareholders of blockbuster are likely to file a class action.

Running a company, especially this kind of listed company, often can't make the most correct decision, the key lies in this.

In the final analysis, it's because Simon didn't buy blockbuster completely.

If 100% of the shares are held, the boss can do whatever he wants.

Nancy quickly added: "however, in addition to the cancellation of late fees, I'm also considering cutting off some of blockbuster's edge businesses, such as film peripheral sales."

Simon said with a smile, "this part of the business was put forward by you."

"Yes," Nancy did not deny, "but in recent quarters, after recalculating the cost and return ratio of this part of the business, I think it's better to cut it off and return to the core of video retail. This can save a large part of human resources and make it more convenient for blockbuster's management and further expansion. "

When Nancy finished, she gave Simon an interesting look, even with a hint of whether you want to ask me or not. Blockbuster's peripheral products retail, the main sales, in fact, is danilisi entertainment related video peripheral products.

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

Of course, it's impossible to do so at a cocktail party in full view of the public.

Nancy is aware of something, instinctively shrunk his neck, and then not to be outdone to look over, a pair of you pinch ah pinch ah have the ability, you pinch ah bold look.

Simon, of course, would not really do such an abrupt thing, saying: "as long as you think the right decision, you can do it. However, Nancy, you need to bear the consequences. And don't forget, you're more of the group president in charge of consumer goods business at Denise entertainment. "

Nancy gave up some of her thoughts and said solemnly, "I'll think about it very seriously."

Small female executives also suddenly understand.

For blockbuster, the proportion of investment and return on peripheral product sales may not be too high. It will also increase the chain store's labor, procurement and logistics costs. However, this can greatly increase the peripheral product revenue of Denise entertainment.

The profit margin of blockbuster in the sales of peripheral products may be very low, but the income that danilisi entertainment can obtain is very high.

Nancy's energy in recent months has been too much on blockbuster, and she is inevitably neglecting her own duties. In fact, she just mentioned this matter, which is just an immature idea after analyzing the financial reports of blockbuster in recent quarters.

If you think about it carefully, she will not raise it rashly.

Women are always easy to vent their anger. With a touch of shame, Nancy felt that it must be this guy in front of her that made her have some small emotions of confrontation.

Yes, it must be.

I'm obviously right.

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