Right time for a new approach at Blockbuster
May 2, 2008

You've got to give Blockbuster this--the rental giant looks determined to reinvent itself, with or without Circuit City.

While Circuit City got what-for from two of its largest shareholders over its resistance to provide due diligence to suitor Blockbuster, Big Blue more or less went about its business over the last week. But it was anything but business as usual.

The company opened the week with reports that it is in talks to invest in the premium video-on-demand movie channel being launched by Paramount Pictures, Lionsgate and MGM. According to the Wall Street Journal, Blockbuster is negotiating to back the new channel in exchange for exclusive digital rights. Then, Blockbuster said it is selling videogame hardware and software in all of its stores.

Blockbuster wants to buy Circuit City as a vehicle to expand beyond its core packaged movie business. But with last week's forays, the retailers has shown it intends to do that with or without Circuit as a partner. 

It is high time for this change, especially given that the home video window--or what used to be the home video window--has collapsed. Forever.

In its place is a new, broader home entertainment window comprising DVD and its successor packaged media and various forms of direct-to-home delivery, including electronic sell-through and cable and Internet VOD, as was evidenced by news from Apple and Time Warner this week. 

I believe consumers are using to new situational uses of home entertainment--downloading or VOD when it's convenient, for example, for DVD for collectability and repeatability.

Blockbuster has know for years that it needs to evolve to provide its customer what they want in every situation.

Posted by Marcy Magiera on May 2, 2008 | Comments (1)