Circuit City “takes Blockbuster at its word” that market conditions prompted Blockbuster to yank its bid to acquire the chain, a Circuit City spokesman told Consumer Electronics Daily Wednesday. The spokesman wouldn’t comment on bloggers’ speculation that Blockbuster ran for the hills when its due diligence found Circuit City’s books in worse shape than expected. That speculation helped cause Circuit City’s share price to plummet to a 52-week low of $2.10 before recovering some. The price sank to levels not hit since 1990. Blockbuster shares shot up more than 10 percent, reflecting investors’ relief that it had abandoned the Circuit City takeover, analysts said. “Our exploration of strategic alternatives is intended to serve the interests of our shareholders by considering every possible alternative to enhance shareholder value,” CEO Phil Schoonover said. “The board’s review was not dependent on Blockbuster’s participation. We are diligently working with the parties involved in the process, and intend to continue our thorough approach until such point as the board determines upon a particular strategic course of action. The board has not established a deadline for completing the review.” A JPMorgan report Wednesday said at least two other potential suitors are still doing due diligence on Circuit City’s books. Circuit City doesn’t plan “to disclose further developments unless and until the board has approved a course of action,” Schoonover said. Analysts speculated that Blockbuster wasn’t finished trying to find a channel to sell CE devices. Blockbuster, which doesn’t sell TVs, is studying whether it should, CE Category Manager Jeff Smith told DisplaySearch’s TV Supply Chain Conference last month (CED June 9 p1). Blockbuster is asking itself, according to Smith, a former CompUSA executive, whether that business makes sense, including because TVs are “something our customers give us permission to sell.”
Paul Gluckman
Paul Gluckman, Executive Senior Editor, is a 30-year Warren Communications News veteran having joined the company in May 1989 to launch its Audio Week publication. In his long career, Paul has chronicled the rise and fall of physical entertainment media like the CD, DVD and Blu-ray and the advent of ATSC 3.0 broadcast technology from its rudimentary standardization roots to its anticipated 2020 commercial launch.
Open-device concessions that XM and Sirius have proposed to the FCC in seeking approval of their merger “will not prevent a merged satellite company from acting in an anti-competitive manner,” iBiquity Digital CEO Bob Struble told us in an e-mail Friday. IBiquity wants the FCC to mandate HD Radio reception in all satellite radio receivers with AM/FM tuners to level the playing field between satellite and terrestrial digital radio. The XM-Sirius proposal “does not eliminate existing exclusivity arrangements that XM and Sirius currently have with virtually every auto manufacturer today,” Struble said. Nor does it “address many of the technical issues that would bar the inclusion of HD Radio technology in devices and would create numerous financial relationships the merged company could use to block competition,” he said. “In short, unless the FCC addresses these issues, competition and the public interest will suffer.” As for Pioneer’s opposing iBiquity’s call for HD Radio mandates in XM-Sirius receivers, Struble said: “Pioneer is a long-time and valued partner. We understand their position.”
Circuit City thinks it can react quickly to any flat- panel TV glut this holiday selling season, senior executives told analysts in a quarterly earnings call. Analysts who asked their questions seemed mindful that Best Buy ate Circuit City’s lunch two Black Fridays ago when an oversupply of Panasonic 42W plasma TVs caught Circuit City flatfooted.
Best Buy gained market share “across the board” Q1 on a 3.7 percent same-store sales increase chainwide, President Mike Dunn told analysts in a Tuesday earnings call.
Rent-A-Center must offer free converter boxes to customers who bought or rented an analog-only TV, VCR or DVD recorder May 29 through Aug. 7, 2007, to settle allegations with the FCC it violated the commission’s analog-only labeling order, according to a consent decree released Friday. Conn’s, in a second consent decree released Friday, agreed to participate in the DTV coupon program and to stop selling analog-only TV receivers this year or risk running up monthly fines.
The FCC is lowering the hammer on three general- merchandise chains -- the first retailers to sign consent decrees for violating the commission’s year-old analog labeling order, said texts of the orders released Thursday. The devil isn’t in the modest fines that the chains have agreed to pay, as had been expected (CED May 27 p4), but in the terms they must abide by to have the investigations dropped.
That consumers on average are ordering 104,000 DTV coupons a day suggests that “significant” strains may be put on inventories of coupon-eligible converter boxes “during the next few months,” John Ripperton, RadioShack senior vice president for supply chain management, told a House Telecom Subcommittee DTV hearing Tuesday.
Sony DADC disc replication in Terre Haute, Ind., continued without interruption this weekend despite floods that inundated much of Indiana, General Manager Mike Mitchell told us in an e-mail. “Though we had quite a mess in the area, there was no impact to our operations other than for the very limited number of employees who were unable to make it to work,” Mitchell said.
NTIA plans “as expeditiously as possible” to issue a rule change qualifying nursing home residents as DTV coupon- eligible, an agency spokesman said Monday. Sen. Bill Nelson, D-Fla., wrote Friday to NTIA Acting Administrator Meredith Baker urging that NTIA seek expedited Office of Management and Budget approval of the move. In an “emergency review” request, OMB can approve a rule change within days or weeks, compared with 120 days for a standard request. “The sooner this rule change is approved, the sooner senior citizens can begin to make necessary preparations” for the February analog cutoff, Nelson told Baker. Comments on the proposed rule change were due Monday.
SAN DIEGO -- Sears and its affiliated Kmart are “experiencing a much higher than anticipated level of take” on coupon-eligible converter boxes, Jonathan Zupnik, divisional merchandise manager for TV, video and audio at Sears Holdings, told DisplaySearch’s TV Supply Chain Conference Friday in a retailer panel about TV sales strategies. The chain already has begun funneling more CECB supplies to the five Sears stores and two Kmart stores in the Wilmington, N.C., DMA to prepare for the Sept. 8 DTV switchover there (CED May 12 p3), Zupnik said.