Best Buy plans online movie service
Chain, CinemaNow in talks for downloads
By Susanne Ault and Jennifer Netherby -- Video Business, 4/16/2009
APRIL 16 | Stung by falling DVD sales, Best Buy is on the verge of launching a digital movie service with a third-party partner that could debut as early as this summer, according to studios.
The chain is in talks with CinemaNow and other online movie services to create a download business that Best Buy hopes will offset falling DVD sales, studio execs said.
Details on how exactly Best Buy would benefit from a potential partnership with CinemaNow, and others, are still being finalized. But one possibility, according to studio execs, is that Best Buy would market and sell Web-enabled hardware devices—from TVs to Blu-ray Disc players—that would include immediate, built-in access to CinemaNow’s library. Such devices could roll out as soon as this summer. Best Buy would presumably share with CinemaNow or another third-party provider the resulting download and/or streaming revenue.
Currently, Best Buy is advertising job openings for digital movie executive positions at such tech-geared sites as PaidContent.org.
The strategy is similar to what Blockbuster and online disc retailers Amazon and Netflix have done over the last year. Blockbuster partnered with CinemaNow in January to offer movie downloads through a variety of set-top devices including TiVo digital video recorders and Blu-ray players. The partnered service is set to debut in the second half of the year. Amazon offers its Video on Demand service through TiVo and Roku players, and Netflix offers its instant viewing service on those devices and others.
It’s unclear how Best Buy would align with manufacturers for these new digital movie-enabled devices.
Spokespeople for the chain and CinemaNow didn’t respond for comment.
CinemaNow has pushed to offer its download service through a variety of devices and partnerships. Previously, Best Buy had been working to launch its own separate branded download store. It appears these plans fell through sometime in 2007.
DVD leader Wal-Mart briefly sold downloads with partner Hewlett-Packard through Walmart.com in 2007, but the service never evolved out of a test phase, and the retailer’s site was closed when partner H-P exited the download business. Downloads were tied to a PC and unwatchable on a TV or other devices.
Physical DVD merchandising also is undergoing changes at Best Buy, following the chain reducing staff to cut expenses. Jill Hamburger, VP of movies and entertainment, has left the company, according to sources. She reported to Mike Vitelli, VP of consumer electronics/product management, and it’s not expected that her position will be replaced. Marlys Thorson, merchandise leader for DVD software, also has exited Best Buy.
