Blockbuster-Hollywood Video: where are they now?

In past blog entries we have tried to follow up on abandoned and consummated mergers to find out what happened. (See What happened after the FTC blocked the Heinz-Beechnut merger?).

In 2005, Blockbuster abandoned its proposed acquisition of Hollywood Video during an FTC antitrust investigation. The target, Hollywood Video, resisted the acquisition, and was acquired by Movie Gallery which entered bankruptcy in late 2007. Now, BBI is looking to acquire Circuit City:

Rationale for deal: Synergy w/real estate, buying power, "cross-merchandising" opporutunities. Preloading devices with movies, subscriptions, etc.

BBI just reported Q1 2008 results:

...We are particularly pleased that domestic same-store revenues showed an improvement for the first time in five years primarily as a result of several initiatives we have put in place, including an increased availability of top new movies, improved store merchandising and more effective pricing.

Some commentators think that the FTC should have quickly approved the merger.

anti-trust regulators often miss important shifts in rapidly changing markets such as video and entertainment.

DISCLAIMER: I was Chief economist at the FTC during the investigation.