Friday, October 5, 2012

Blockbuster Has No Future

When Dish Network purchased Blockbuster a year and a half ago, the thought was that they would be able to build up a rival streaming business to Netflix.  And despite Toys R Us now announcing their entry into the video streaming space, Dish has decided their is no future streaming business for Blockbuster.  "Dish no longer has plans to use Blockbuster as a nationwide video streaming or DVD-by-mail service, (CEO Charlie) Ergen said."  An interesting decision considering Coinstar and Verizon are now developing their own video streaming business.  What has changed for Dish?

While Ergen did not say what those future plans are, one has to wonder if the plans are simply to shut it down.  "The company has other plans for Blockbuster on which Ergen declined to comment. Dish has spent 'a lot of time' talking with cable networks about an Internet streaming service for live programming, although the service is probably still 'years away,' Ergen said. 'Worst case, we’ll take our money after having wasted some time, not much money, and life goes on,' Ergen said."  As relationships in general between Dish and cable networks have been less than warm, it seems more likely that the reality is closer to a shut down or sale of Blockbuster.

Overall, the streaming space seems already crowded with platforms selling the same video libraries - Apple, Netflix, Amazon, Wal-Mart, Toys R Us, Coinstar/Verizon, etc.  While Blockbuster has a brand value, it may also suffer from being a brick and mortar experience with dvd rentals and not an online identity.  And the struggle of changing its value proposition from store front to a digital business is what ultimately hurt Blockbuster's chances for success.

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