This quote by the CEO makes me suspicious:
"The company said its same-store revenue in both rural and urban markets declined more than expected due to what it termed "the worst box-office slump in more than two decades,"
The Hollywood box-office slump happening now is at *theaters*. One of the reasons for this movie-going slump is the explosion in home theater technology, i.e., wide-screen TVs, surround sound systems, etc. People enjoy simulating the theater environment at home. And what do people watch at ome? Yep, rentals! Based on this, you'd think a Hollywood box-office slump would be good for the industry!
Not necessarily. I go to the rental store and if I don't find anything interesting I don't rent. So technically it could leak down to rental business and be bad for the industry. The sector is not going to hit the ball out of the park but it will be stable/slow grower. Cash flow is solid so good chance for buybacks if management is smart. EPS growth prospects are fine IMHO even with slow growth. Looks like the aquisition cycle is over among the majors.
BBI is full of overpaid exceutives and is trying to recoup after Red's savy deal, or at least from Viacom's perspective.
Online rental again IMHO does not appeal to a large population and there is no real threat of it taking over the brick & mortar.