Blockbuster has unveiled an aggressive expansion plan for Argentina. Starting next year, the Viacom-owned home video retailer will begin to offer franchises in regional Argentine cities, in a bid to double the number of outlets it has in the country.
Blockbuster currently enjoys a 37% share of the Argentine market, with 80 stores, 85% of which are situated in the capital of Buenos Aires and surrounding towns.
The new Argentine franchises will cost between $200,000 and $300,000. Existing home video stores which wish to link up with the Blockbuster chain will pay a special rate of between $100,000 and $150,000.
"We have had a very positive response so far and expect to make announcements as the deals are finalised," said Alejandro Fava, general manager of Blockbuster Argentina.
In addition, Blockbuster Argentina will launch a web-site that will allow customers to rent titles and purchase DVDs, gift items, books and snacks from their home computers. Rental titles will be delivered to their homes within two hours.
Blockbuster has also agreed with distributors to increase the number of copies it carries of larger titles by 200%. In exchange, Blockbuster will share revenues with distributors.
Blockbuster debuted in Argentina in 1995 at a time when 8,000 video outlets existed. Despite the economic crisis, the US company has thrived as families have sought cheaper forms of entertainment. It doesn't have any rival chains to contend with although Argentina has about 2,800 "Mom & Pop" stores.
"Our biggest competitor is cable TV which has a 65% penetration," said Fava. Piracy penetration is estimated at 50%.