Blockbuster's set-top box plans

Blockbuster is feeling the love again in its love-hate relationship with the Internet, and this time I think the company is serious. The Hollywood Reporter says Blockbuster is making a set-top box for streaming movies to TVs, and could announce the service this month. The device would be tied to Movielink, the online movie service for PCs that Blockbuster bought last year. 

It's an ambitious move for a company that has never figured out the Internet. Blockbuster has bumbled around while Netflix, Amazon, Microsoft, TiVo and others found ways to marry video and the Web. Blockbuster went guns blazing after Netflix two years ago, pouring money into its DVD-by-mail service before deciding to pull back and retrench.

Now, Blockbuster is making some smarter moves. For one thing, it's actually doing something with Movielink. And by offering a streaming box, it avoids the messy license and DRM issues that come with a downloading service. But Blockbuster faces some real problems, which may be why its stock price only rose less than 2% on the news today.

The company is jumping into a crowded pool. We already have set-top rental boxes from Apple TV, TiVo/Amazon and Vudu (and the rental options on Microsoft's Xbox 360), and Netflix is coming out with its box later this year.

To survive amongst that kind of competition, Blockbuster needs to excel in two areas: content and ease of use. It needs to work its relationships with movie studios to get the widest selection of films. And it could take some lessons from TiVo on how to make a fun, no-instruction-manual-needed service. Frankly, I'm not sure Blockbuster has what it takes to avoid being an also-ran in this market.

Yes, the set-top box could cannibalize Blockbuster's more profitable in-store business. But technology is eroding that market anyway, and Blockbuster has little choice but to jump on board.

Disclosures: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write. 

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Comments

 

Wouldn't it be a much better idea for Blockbuster to join forces with Comcast On Demand? Or maybe even Tivo or another company that is already doing these sort of things?

I used to use the Blockbuster mail order service myself but it was kind of a hassle.

A lot of the time the DVD's I recieved were so badly damaged that sometimes certain parts of the movie would lock up, that is if the movie played at all.

Now, we usually just order using the on demand service.

jesse (Posted 04.11.08 10:29 AM) Report Abuse

Blockbusters is way behind the powercurb in streaming content. There is no way that they can hope to out-duel Netflix in service, content, and profitability. This  we've seen before.

Of course, competition is always good - as it keeps the service prices low, but, Blockbusters is no where near the service quality, movie variety, and payment plans as Netflix. I know, I've had both services.

Jerod Maddison (Posted 07.26.08 10:27 AM) Report Abuse

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