I just attended a press conference hosted by Dish Network and its Blockbuster division, where they announced Blockbuster Movie Pass, a service with discs-by-mail (including Blu-Ray and games at no extra charge), unlimited on-demand streaming to TVs and PCs, and more–for $10 a month. Sounds like a formidable competitor to the service formerly known as Netflix, which is about to be divvied into Netflix and Qwikster. Except it turns out that Dish isn’t announcing anything aimed at consumers who have cable or who want to cut the cord–Movie Pass is for Dish subscribers (and includes twenty channels of live movie programming via satellite as well as its other stuff).
Tag Archives | Blockbuster
It isn’t easy being Blockbuster. When the company’s in the news, the news is usually lousy–like in September of last year, when the once-mighty video rental chain went bankrupt.
This, however, has been a good week for Blockbuster. Sort of. At least if you assume that a bad week for Netflix is automatically a good one for Blockbuster.
Blockbuster seems to think so. After Netflix ticked off customers by raising the cost of subscribing to plans that include both streaming and DVDs-by-mail, Blockbuster issued a press release which it titled “Blockbuster Rescues Furious Netflix Customers.” Oozing schadenfreude, it quoted Blockbuster’s president saying that Netflix’s price hikes were “shocking” and pointed out some advantages of Blockbuster over Netflix, including Blu-Ray rentals at no extra cost, the availability of game rentals, the ability to return discs to a brick-and-mortar Blockbuster location, and no 28-day delay before new titles arrive.
Satellite TV provider Dish Network wants to become satellite TV and video-rental retailer Dish Network. It announced today that its bid of $320 million ($228 million in cash) was enough to win the auction to buy Blockbuster, the venerable, ailing video chain that went bankrupt last September. Assuming that the sale goes through, Dish will get itself 1700 stores and other Blockbuster properties, such as its on-demand services for PCs, phones, and set-top boxes.
Dish’s statement was optimistic, but cautiously so:
“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISHNetwork,” said Tom Cullen, executive vice president of Sales, Marketing and Programming for DISH Network. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”
With the news of Blockbuster’s bankruptcy, I’m wallowing in Blockbuster nostalgia. Don’t worry, I’m pretty sure it’s a temporary condition. But after the jump, a few vintage Blockbuster TV ads–get ready to see lots of shelves packed with VHS tapes in bulky boxes…
Blockbuster has filed for bankruptcy. The company is staying in business and apparently doesn’t plan to shut down any stores at the moment, but the fact that it’s in deep trouble does not exactly come as a gigantic surprise. Between Netflix DVDs-by-mail and Redbox kiosks and various streaming and download services and cable-TV on-demand services, the whole concept of driving to a large store to rent a movie on a shiny disc is an inherently antiquated concept.
Blockbuster is finally taking its mail-order game rental service nationwide, and I’d be a little more excited if the pitch wasn’t slightly misleading.
On Blockbuster’s website, the movie and game mail-order service seems like a knockout. For $9 per month, you can rent one disc at at time. That’s the same price as Netflix, and although there’s no streaming video, you can rent video games and Blu-ray discs for no extra charge. Two discs per month costs $14, and three discs costs $17.
Salon’s Matt Zoller Seitz writes an only slightly premature eulogy for Blockbuster.
I had a touch of déjà vu today after reading that Blockbuster is testing a mail-order video game rental program in Cleveland, with plans for a nationwide rollout before year-end. That’s because 14 months ago, Blockbuster was telling essentially the same story.
It’s not clear what happened. Did the pilot program die and come back to life, or is testing just taking a lot longer than planned? Whatever the case, you still have to be a mail-order movie subscriber to rent games, but the pricing has changed. It’s now $7.99 plus tax for every month you rent a game, instead of $5. You can only rent one game at a time, and it counts towards your allotted number of movie rentals.
Blockbuster’s plan would be more enticing if you could take out games from the store, but only exchanges are allowed, and they cost $4.99 for each new game you take out (exchanges for movies cost less, depending on your rental plan). I’m guessing Blockbuster’s financial troubles make it harder to offer big bargains.
Looking over my coverage from February 2009, it’s funny how I said it would take significant savings to pull me away from GameFly. Cut to the present, and I’m thinking about ditching mail-order game rentals altogether. Too often, I’ve tried to get the newest releases from GameFly, and waited weeks for availability. Even months-old games take a little while to ship.
Mail-order game rentals don’t work when you’re trying to play the next big thing. There are only a few top-tier games that come out every month, and everybody wants them. Rarely is there an off-the-beaten-path game (like the equivalent of an art-house flick) that no one’s waiting for, so you stand in line with everyone else. Unless Blockbuster figures out a solution to that problem, its system won’t fare much better than the competition.
Is copying Redbox’s strategy a way for Blockbuster to survive? I’m beginning to think so.
Earlier this week, I rented from a Redbox for the first time. I have walked by these kiosks in our area for well over a year now, and in recent months they’ve become quite numerous — Redbox lists 19 of them within 10 miles of my house alone. The allure of a movie for just a buck a night is just too good of a deal to pass up.
While entering my selections into the kiosk — Star Trek and Angels & Demons — I couldn’t help but wonder why Blockbuster wasn’t doing the same thing. Heck, it costs you $5 to rent these same movies at their stores no matter whether you return them the next day or however long your local store allows the movies to be out.
It’s for this reason why Blockbuster is struggling. In this new world, it no longer is worthwhile to have a storefront because of the overhead costs. Think about it. Netflix has considerably less infrastructure costs because all its business is online and only needs shipping warehouses to serve its customers; Redbox has even less overhead since it essentially freeloads off the locations where its kiosks sit.
There’s just no way that the company can be on a level playing field with its competitors because of this. Tuesday’s news of the company partnering with NCR to place 200 “Blockbuster Express” kiosks in Duane Reade Drugstores across New York City could arguably be Blockbuster’s path to salvation.
When the company is done, about 2,500 kiosks will be up and running around the country. Each will hold about 900 DVDs, which will give the movie retailer an opportunity to offer a wider selection than that of Redbox, which can only hold about 500 discs.
As the company moves to this system, it will allow Blockbuster to continue closing down its retail locations, which have become its Achilles heel. This will stink for those employees that could soon find themselves out of a job, but its just a reality of our modern digital economy.
It’s going to be very interesting to see how Redbox responds. Blockbuster eliminated its competition by simply being able to offer a broader selection of movies than its smaller competitors, and now the company that arguably pioneered the movie rental kiosk finds itself in the same situation.
One thing it has so far as an advantage over Blockbuster is scale — some 17,500 kiosks are located in McDonald’s, Wal Marts, Walgreens, and other grocery and drug stores around the country. Blockbuster will need to quickly ramp up to legitimately compete.