Blockbuster Announces Plan for In-Store Movie Download Kiosks

Blockbuster, Inc., has a new plan coming out in June 2008 to keep consumers' allegiance from switching to rival movie rental company Netflix: If consumers want to download movies, they can; but they can only do it in Blockbuster stores.

The move, announced yesterday, is part of a broader plan to re-invigorate lagging profits. Blockbuster, the aged movie rental company that has tried repeatedly to stop Internet-based rival Netflix from enroaching on its market share, has appeared to be fighting a losing battle. As consumers moved to renting movies through the Internet and having them delivered in the mail, Blockbuster was forced to close many of its brick-and-mortar stores. However, even its online rental branch, which was meant to take on Netflix on its own turf, never became as big and profitable as the retailer hoped.

The download plan is actually kind of strange. According to Blockbuster's CEO's announcement at a corporate meeting, Blockbuster will be setting up kiosks in a select few of its stores. These kiosks will let Blockbuster consumers download movies onto portable movie players made by Archos. The catch, of course, is that consumers must not only own an Archos-manufacturerd portable movie player, but will also still have to drive to a physical Blockbuster location.

This seems counter-intuitive when compared to Blockbuster's main rival, Netflix. Netflix allows consumers to search a movie library online, request a movie, and have it delivered to their door (often by the next day). Blockbuster's move is also hardly revolutionary when compared to initiatives by Netflix to let customers download and stream movies to their TVs uses the Netflix Player hardware. Computer manufacturer Apple, Inc., meanwhile, lets users of their Apple TV box similar privileges: Movies can be searched, rented and watched within minutes just by using a wireless Internet connection and the Apple TV hardware connected to their TV.

Apple and Netflix are not the only competitors to Blockbuster's coming download plan. Amazon.com already offers movie downloads through Amazon Unboxed, while cable television companies have been offering video on demand for years.

With such competition, it is hard to see why consumers will want to drive to a neighborhood Blockbuster simply to download a movie onto a movie player that they'll have to buy on their own.

One way Blockbuster could make this plan more successful is if they opened up the movie download kiosks to more portable movie players than just Archos-manufactured devices. One can imagine that a kiosk that let you plug your iPod into and download a movie immediately could have potential. At the same time, Apple has long offered this service through iTunes from the comfort of your home computer. Thus, Blockbuster's plan is still very puzzling.

Time will tell if the new Blockbuster movie download kiosks will be attractive enough to lure consumers into driving to their neighborhood Blockbuster store instead of using Netflix, Apple, or the host of other alternatives. Blockbuster obviously has a long way to go to beat Netflix in the movie rental business.