Thursday, October 4, 2012

Toys R Us Continues Its Push Into Digital

The video streaming business just got more crowded with the arrival of a brand new service from Toys R Us (TRU).  On the  heels of its announcement of its own tablet, TRU will be streaming television and movies under a rental model.  " The site will be powered by Rovi (ROVI)Corp, a digital entertainment technology company." Future plans include apps for Apple and Android devices, as well as their own Tabeo tablet.

Unfortunately, it is a very crowded field already dominated by iTunes, Amazon, and Netflix, with Wal-Mart's Vudu pushing its service as well.  If the titles being offered are all the same, won't customers simply be motivated to seek the lowest priced streaming service.  TRU must also contend with building a video streaming library of comparable size as its competition.  It is hard to imagine that customers will want to use too many different platforms to serve their video consumption strategies.  Netflix and Amazon have built an all you can eat buffet of videos while Apple likes to sell a la carte.  How TRU differentiates its service is crucial to gaining a measurable market share.