Is it Lights Out for Blockbuster?

[Chris Gohlke]

<div class='os_post_top_link'><a href='http://news.cnet.com/8301-13506_3-9991562-17.html?part=rss&subj=news&tag=2547-1_3-0-5' target='_blank'>http://news.cnet.com/8301-13506_3-9...ag=2547-1_3-0-5</a><br /><br /></div><p><em>"Instead, it's (once again) Netflix realizing that the future of the the rental business isn't in the brick-and-mortar and probably not even in the mail sector. It's Netflix that's adapting to the changing times by streaming movies and TV shows to its Roku box and, now, the Xbox 360. And in one fell swoop, Netflix has once again made Blockbuster irrelevant. What other recourse does Blockbuster have now other than to keep plugging away with its brick-and-mortar business and hope to stay afloat long enough to sell it off to the highest bidder? It's not only the loser in the rental business, but now that it's slow to the streaming game, how can it capitalize on the market?"</em></p><br /><p>&nbsp;</p><br /><p>Blockbuster could of course team up with Sony, but I find that unlikely. Blockbuster may very well be snuffed out of existence in the next few years. Netflix may well own the streaming market which greatly diminishes the top end of the market. Meanwhile they can always go for the low end of the market that is years, if not decades away, from really being ready to stream. But on that end, they are going to get squeezed by kiosks like the ones going in Wal-mart that rent movies for $1 per day.</p>

[Rob Alexander]

Well, I have no interest in owning an Xbox 360 and the Amazon streaming downloads that work with my Tivo are more expensive than my Blockbuster subscription so at least for now I'm quite content to continue with the DVD-by-mail route. I do take your point that streaming is the inevitable direction of rental movies in the future, but it's a little early to suggest that all the opportunities are gone with the XBox. For example, I can see potential deals to be made with cable and satellite companies, just off the top of my head.

[Felix Torres]

Well, I have no interest in owning an Xbox 360 and the Amazon streaming downloads that work with my Tivo are more expensive than my Blockbuster subscription so at least for now I'm quite content to continue with the DVD-by-mail route. I do take your point that streaming is the inevitable direction of rental movies in the future, but it's a little early to suggest that all the opportunities are gone with the XBox. For example, I can see potential deals to be made with cable and satellite companies, just off the top of my head.

Yes, there are deals to be made there and in fact Cisco's Scientific Atlanta has been working on a cable box that can do streaming and downloads for two years now. No deployments that I've heard of, though.
Mostly because the cablecos and satcasters are happy with the revenues they get from their existing "ondemand" system. They don't have much incentive to take on the burden of setting up a whole new with datacenters, servers, etc.

Blockbuster itself was teaming up with MS as far back as 2004...
http://www.microsoft.com/presspass/press/2004/aug04/08-12msnmoviespremierpr.mspx
...so if they haven't gained traction its not because they are blissfully unaware of the market. They just have never been aggressive enough.
Look at the Netflix deals, like with MS and Roku: Netflix is taking on the full burden of hosting the servers, acquiring the customers, and are probably sharing the revenue with MS, to get their foot in the door with the 10 million or so 360 owners in NorthAM.

Blockbuster bought movielink after the studios failed to make it work and has done very little with it in the past year. And the recent bizarre saga of trying to buy Circuit City and then deciding "its not really worth buying" after being turned down suggests their management just don't know whether to zig or zag.

I think its fair to wonder what their fate is going to be like cause they certainly don't seem to have a viable long-term strategy.

Best case scenario at this point would be to sell out to Sony or Apple, I guess...

[Bob Christensen]

I agree with you, Chris. Blockbuster seems to consistently stumble regardless of what strategy they try to pursue. When they entered the by-mail competition with NetFlix, I signed up with them because of the free exchange you could get in their stores. It was a great deal, I thought. Well, it must of been too good of a deal because then they increased their prices and limited the number of exchanges you could make.

Now I'm happy with Netflix by mail and the unlimited instant downloads to my PC (which I usually watch on my LCD with a simple DVI to HDMI cable and audio cable). I've wondered what kind of picture quality you get with their new Roko device that streams video to TVs. Can anyone comment on the PQ and resolution you get with the Roko or Xbox?