“Blockbuster Inc.’s attempt to buy Circuit City is baffling to many analysts, who think the video-rental chain needs more time to turn itself around before undertaking a costly acquisition,” David B. Wilkerson reports for MarketWatch. “Another question on their minds is whether consumers will embrace the merged concept if it does become a reality.”
“‘I think it’s kind of screwy,’ says Michael Pachter of Wedbush Morgan Securities. ‘Because if, in fact, you wanted to go to a big-box retailer to rent movies, why wouldn’t Costco have them? Why wouldn’t Target? Or Wal-Mart? If it’s such a great business, and you can leverage the store base, why isn’t everyone doing it?,'” Wilkerson reports.
“In January, Blockbuster got a jolt when Apple Inc. announced a movie-download rental service at its iTunes store. Consumers can rent new releases for play on a computer, iPod or iPhone for $3.99 for a 30-day period, while older titles go for $2.99. All of the major Hollywood studios are backing the offering,” Wilkerson reports. “The news came a year after Apple unveiled Apple TV, which enables consumers to stream iTunes content, including movies, music and podcasts, from computers to TVs.”
“In rushing to do the deal now, on the heels of Apple’s move into movie rentals, Blockbuster may be repeating an age-old error commonly made by Hollywood studios, according to Ralph Tribbey, editor of the DVD Release Report, a trade newsletter,” Wilkerson reports. “‘Hollywood always gets ahead of itself,’ Tribbey said, pointing to the panic among movie executives who historically feared that television, and later videocassettes, would wipe out or substantially curtail their businesses. The DVD-rental business should remain stable for many years, he said, even as more consumers download movies straight from computers to their TVs.”
Full article here.
Number of movies we’ve rented via Apple TV in the last 30 days? Nine (9). From Blockbuster or any other outfit, brick and mortar or otherwise? Zero (0).
How can anyone with a functioning brain cell think that this will benefit either business?
Let them do their thing and fail. In the end those customers will end up buying Apple TV. So more sales for Apple TV.
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> why wouldn’t Costco have them? Why wouldn’t Target? Or Wal-Mart? If it’s such a great business, and you can leverage the store base, why isn’t everyone doing it?
Brilliant analysis, probably from the same folks who predicted failure of Apple retail stores.
MDN editor has rented nine (9) movies from Apple TV and none from Blockbuster? I’m shocked! SHOCKED!
My stats:
Rented movies from Redbox: 10
Rented from Apple/Blockbuster/Neflix: 0
My rented movies from anywhere = 0. So there!
Okay, my turn: Movies rented from iTunes: 2 (+4 tv shows purchased)…number from Blockbuster/Netflix/Redbox: 0.
iTunes: 4
Blockbuster: 1
Month before:
iTunes: 1
Blockbuster: 4
It grows on you.
It’s more than likely recognition of the impending death of their business model. Netflix cleaned their clock in renting over the web. Red Box machines at most Wal-Mart and McDonalds locations, are poised to kill the weekend impulse rental market. Lastly Apple has an almost unstopable product in the new film download market.
They are chosing to adapt by changing markets. If they don’t they will die
With the Gasoline cost trending up– online renting will trend up along with it.
Tipping point for many transactions in the future.
Subtle, yet steady, pressure to change lifestyle habits.
Yeah, it’s “screwy” all right.
As I said earlier, this is nothing more than two dinosaurs looking to screw. And the problem with two dinosaurs looking to screw is that they’re still two dinosaurs whose ultimate fate is already sealed.
Peace.
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Olmecmystic
I love my local video store, the last indie place standing whose survival is dependent on the fact that they have, like, EVERYTHING: anime, documentaries, television series, classics, cult films. I will continue to support them as much as I can, but I rented a flick from Apple over the weekend on my 24″ iMac, and it was a painless experience that saved me from having to go out in the crappy Minnesota weather. I can see an Apple TV in my future, probably next fall when the weather turns again.
iTunes movies rented: 3
Blockheader: 0
I can’t remember if Cringely wrote about this, but Blockbuster would be better off setting up kiosks for iTunes downloads, and letting people fill up their iPods with music and movies that can be sideloaded back to their Macs or PCs when they get home. As the kiosk would be the central server repository, the downloads would be superfast compared to the internet. Darn, I just realized the speed issue is really with HD material, and you can’t download HD to anything but the AppleTV so far.
How is this better than just picking up the DVD? Well, the DVD is never out of stock, right? No return trip, right? No scratched DVD, right? Infinite list of media, right? Instant supply, right? Lower cost, perhaps? No late fees, right? Digital media coolness, right?
This would be an evolution of the Starbucks iTunes setup, where you can only download music.
In the past month
iTune rentals: 4
Others, anywhere, any stripe: A big zero
Nearest one is 50 miles. Gotta be some great deals there! To bad gas is $3.70 a gallon.
I swore I would NEVER rent a video again when I got hit by the false late fees scam that Blockbuster ran.
Since AppleTV started renting, my family has rented at least one movie per week..
We ain’t got no stinkin movies here in the UK. I may, on occasion, torrent a title or two. Let me pay, let me do the right thing.
I save tons of money renting from iTunes. No more late charges. Instant gratification. You can watch previews. Can’t do that at Blockbuster.
iTunes Rental/Purchase: 0 (not available here – yet)
Netflix: 0 (not available here)
Blockbuster: 0 (not available here)
There! Hope Steve will give me something to watch soon! 🙁
with version 2.0 9 rentals
with the 2.01 up date, 2ea and I doubt very few more
with 2.0, if you started a movie, (like when the kids go to bed) and when you got tired you paused it, it would still be available the next night after the kids are in bed.
Not any more, 24 hours and it is gone!, with our lifestyle, we need 2 nights to finish a movie, just give us 72 hours, and we are back in
There are good brick & mortar video stores out there. Most are local guys who love what they do. None are called Blockbuster!
Blockbuster however is PANICED! Maybe they can better spend their $$$ buying that Mac Clone Company that just got a cease in desist order.
I got a rock.
I thought Blockbuster went out of business years ago!
To be honest, they should have foreseen this years ago and got into movie downloads long before Apple joined the market.
MDN’s comments are exactly right – this is a knee-jerk and panic action by a company with no vision and is an action to try and salvage a business model that has been changing for many years.
But Blockbuster, just like the majority of Apple’s competitors have no vision or instinct to survive by innovation.
I seriously cannot see how this will compete with the iTunes Store.
Physical media is diing and that’s a fact – downloads, real-time streaming and subscription based online services are the future of all paid for entertainment.
RIP Blockbuster 2010.
Movies in the last month.
Apple TV: 3
DVD: 0
I also dropped HBO and Stars from my cable
I think zaxxon4 got it right. Blockbuster sees the writing on the wall, their business model is under attack, first from Netflix & now from iTunes. They want to use their proposed acquisition of Circuit City to move into a different market. They purchase Circuity City now while they still have the resources to pull it off & then in a year or two the sell or spin off their “movie rental division”. It’s a gamble, but what else do they got? Of course, they’re betting that they can turn around Circuit City & make it profitable again.