Blockbuster Mexico is set to pounce on main rival Grupo Videovisa. "We're definitely interested in acquiring some of Videovisa's assets, including sites, outlets or inventory, provided they fit in with our long term strategy," said Diego Cosio, Senior Vice President, Blockbuster Latin America. The beleaguered Videovisa has been placed on the block by the group of banking entities which acquired it from major broadcaster Televisa in 1993.

Blockbuster currently owns 205 stores in Mexico and plans to open an additional 30 during the rest of this year, according to Cosio. "The Mexican home video market has the potential for 450 Blockbuster outlets," he added. Videovisa has a franchise network of 500 outlets under the Videocentro brand and another 400 under the Videovision banner. In addition, Mexico has about 4,000 mom & pop stores, many entrenched in low income neighborhoods. Piracy is still high and is believed to halve the potential market.

The good news is that Mexico's home video market is robust, with a VCR penetration of 55% to 59%. DVD households have swelled to 250,000. "We want to grow on this wave, " said Cosio. Costing an average $150 per unit, DVD players have become more affordable in Mexico but multimedia computers with DVD playing capacity have been mainly driving the market.