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Valleywag
The video-rental store is doomed, and even Blockbuster has figured that much out. That's why CEO Jim Keyes is trying to buy Circuit City for more than $1 billion? Blockbuster has become the RadioShack of its time, saddled with too many stores which are too small, selling the wrong thing. It jumped on the business of selling DVDs, instead of renting them, right as disc sales peaked and started to drop. Now, it hopes to sell, via Circuit City's larger outlets, subscriptions to its online video services alongside the devices used to play them. The vision is inspired by Apple, which sells iPods, Apple TV set-tops, and music and video through iTunes. Apple's iTunes movie rentals are a direct threat to Blockbuster's remaining rental business, and Apple is rumored, too, to be getting into the business of music subscriptions. One small problem: It's not clear how Circuit City helps Blockbuster.
Joseph Weisenthal at PaidContent deftly pinpoints the hole in Keyes's theory: Circuit City has already tried selling media subscriptions at the checkout before, with Napster, and it hasn't worked. Retail is a ruthlessly competitive business, one at which neither Blockbuster nor Circuit City has shown particular skill. Wal-Mart, Best Buy, and Target will easily scoop up this combination's customers while it tries to make a poorly thought-out strategy work. Wall Street recognizes that much, which is why Blockbuster's shares are sinking. When will Keyes, who has quietly pursued this merger since December, and is just now taking the effort public, get the message? (Photo by David Pellerin/AP)
Comments
This is wonderful news! I like when two crappy companies team up. Now if we can only get Yahoo! and AOL to get going, we'll be spared 4 crappy companies. Viva La Takeovers!
http://www.seriouswheels.com/1950-1959/1951-Studebaker-Commando-Green-FA.htm
erp, tried that comment-image thing, didn't work... It's like Packard and Studebaker for the 2000s! How does a formerly high-riding legacy chain of video rental superstores make a small fortune doing video rentals in the wide broadband era? Start with a large one.
Oh Owen, you missed an obvious stab at the even EARLIER attempt by Circuit City to do media subscriptions. The Napster deal doesn't even compare to the epic FAIL of Divx (not everyone's favorite video compression, the other divx).
actually i keep hearing the death knoll of the bells for blockbuster/hollywood video too, but every time I do go there something that's not on Comcast on Demand yet (wtf) the videos are always sold out and the line is around the corner. So, I think BB has a few years to squeeze out $$ from their stores still. I tried Amazon-TiVo rentals but their selection is not the best.
Well I know it's always fun to bash on struggling businesses, but I have to say I actually use and LOVE the BB video rental program. There happens to be a store around the coroner, and the combination of brick-n-mortar with the mailing service, is awesome. Couldn't be more happy with a video rental service. I hope they survive.
@oreilly: I agree. I know all the cool kids are supposed to have Blockbuster, but I've had great service from their online rentals and the integration with brick and mortar stores in the icing on the cake.
@oreilly: I use the BB Total Access as well, get a movie in the mail, take it to the store and get a just released flick to watch (and certainly faster than netflix).
I'll watch digital downloads when there is actual picture quality. This AppleTV, overly compressed crap, just doesn't cut it.
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