Wednesday, March 25, 2009

Blockbuster and TiVo Join to Deliver Digital Movies

I hate "me too" strategies. That Blockbuster is following the Netflix model to simply try and duplicate their business strategies makes little sense. How are they differentiating themselves? As Netflix continues to build a leader strategy, Blockbuster continues to look confused and flustered. So to join with Tivo to make online movies available through Tivo boxes produces a yawn. Netflix already owns that space. The only company that wins in this partnership is Tivo who gets another retail partner to distribute its boxes.

Worse than employing a "me too" strategy against Netflix, Blockbuster does even less to differentiate from cable and VOD. "Blockbuster will offer a smaller selection of about 5,000 to 10,000 titles at any one time, mostly newer releases like “The Dark Knight” that will typically cost $3.99 to watch over a 24-hour period. The company already offers online rentals through the Movielink service it bought from a group of studios in 2007." Cable gives me the same title at the same price for the same length of time. And while I haven't viewed either picture, my assumption is that cable will also deliver a superior picture quality.

Blockbuster is facing an uphill battle and does not seem to be doing well. If Blockbuster thinks that it will get better titles or exclusive windows on titles that other distributors don't get is hard to believe. Exclusive exhibition windows are fading away to the point that movies are released to VOD and DVD at the same time. Blockbuster needs to be more creative - better pricing models, longer access to movies, etc - something to get a competitive edge. Otherwise, this "me too" strategy appears to be a last gasp before bankruptcy.

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