With the completion of a pilot program that introduced "RadioShack Cool Things" stores inside 130 Blockbuster locations, Blockbuster Inc. (NYSE: BBI) today announced plans to develop a home entertainment electronic offering at its stores nationwide. The decision was made based on Blockbuster's overall work in consumer electronics, including the RadioShack trial, as well as the company's successful sale of other electronics offerings, including DIRECTV, over the past 16 months.

"Through our work in consumer electronics and specifically our trial program with RadioShack, we were able to gain valuable insights in a very cost-effective manner that will enable us to establish a profitable program selling select consumer electronics that complement our core business," said John Antioco, chairman and CEO for Blockbuster.

According to Antioco, the RadioShack pilot program, which consisted of placing a miniaturized RadioShack store inside Blockbuster, included a wider breadth of product than Blockbuster customers wanted and required. Based on results from this pilot program and other tests, Blockbuster will customize its lineup of consumer electronics with a business model that provides for minimal capital investment and a more efficient use of store space and labor than the RadioShack in-store trial required. Blockbuster anticipates being in a position to introduce a selection of consumer electronics later this year.

"Compared to the RadioShack boutiques, we are developing a plan to offer an assortment of products that are much more closely aligned with our core business and include more name brands than the normal RadioShack assortment. Additionally, Blockbuster can leverage third party supply chain arrangements to maximize margins and minimize investment in inventory," Antioco said. "With stores conveniently located within 10 minutes of 70 percent of the U.S. population and our marketing strength, we have a unique opportunity to implement a profitable business model, allowing Blockbuster to grow market share in the sale of certain segments of consumer electronics."

Blockbuster has had a history of selling consumer electronics prior to the RadioShack test. The company began selling DIRECTV in 2000, and in less than one year had become the nation's No. 2 DIRECTV retailer. In addition, the company has sold an assortment of consumer electronics products, including home theater products, DVD and VHS combo players and mobile phones, and a leading fourth-quarter promotion selling DVD players in its stores exceeded expectations. The company also sells DVD players and other consumer electronics in all of its international markets, including gaming hardware in its European and Australian markets, and has had success selling cellular phones in many countries outside the United States.

In February, Blockbuster and RadioShack announced their plan to test a RadioShack store within-a-store concept inside Blockbuster locations. By July, the two companies had opened approximately 130 "RadioShack Cool Things" stores in four pilot markets -- Austin, Texas; Las Vegas, Nev.; Tulsa, Okla.; and Norfolk, Va. Sales transactions in the four test markets continued to grow during the trial, with the most popular selling products including DVD and VHS players, mobile phones, surround-sound systems and accessories like cables and connectors.

Blockbuster Inc. (NYSE: BBI) is a publicly traded subsidiary of Viacom Inc. (NYSE: VIA, VIA.B) and is the world's leading renter of videos, DVDs and video games with nearly 7,900 stores throughout the Americas, Europe, Asia and Australia. The company may be accessed internationally at blockbuster.com. Viacom is the No. 1 platform in the world for advertisers, with preeminent positions in broadcast and cable television, radio, outdoor advertising and online.