According to the Hollywood Reporter, Blockbuster is shopping around for hardware to help it bring its customers media in yet another format. Blockbuster already has stores and mail and is now working on kiosks and downloading, through portable content-enabled devices. This would obviously be direct competition for Apple.
Blockbuster rival, Netflix is bringing to market a product made by LG that hopes to compete in the download rent market as well. However, both of these companies are months behind Apple in development and don’t have anywhere near the competency in making easy-to-use, powerful consumer software.
The product would be an offshoot of Movielink, the online film service Blockbuster acquired last year that allows consumers to watch films licensed from the major studios on their PCs.
Delivering movies to TV might be the most audacious attempt yet that Blockbuster is making to reinvent its brand as digital delivery weakens the viability of its retail footprint. But by offering a home-based alternative to its stores, Blockbuster risks cannibalizing its core brick-and-mortar business in the hope that its brand will be a force online.
The device is believed to be a stand-alone product akin to Apple TV as opposed to embedding a Blockbuster-branded service in such existing devices as Microsoft’s Xbox 360 or TiVo. While going it alone could give it a distinctive positioning in the crowded "over-the-top TV" marketplace, that won’t come without significant investment in marketing and manufacturing, though the latter cost might be shared with a consumer electronics company that has yet to disclose its participation.
Blockbuster knows all too well the importance of online film rentals. When Apple said in January that iTunes would adopt a rental model, it sent Blockbuster’s stock plummeting 17% to an all-time closing low (HR 1/16).
Movielink was created in 2002 by MGM, Paramount, Sony, Universal and Warners. Five years later, the underperforming venture was sold to Blockbuster for $6.6 million. The deals give Blockbuster online rights to about 6,000 movies, though there are restrictions on moving content beyond PCs and TV.
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