Word hit the web late last night that Blockbuster has acquired Movielink, an online movies-on-demand service that, despite having the backing of some of Hollywood’s key content providers (ie: studios like Warner Brothers and MGM) has struggled to reach critical mass. In the deal, Blockbuster acquires Movielink’s technology, plus the rights to distribute their library, which, if made available through Blockbuster today, would instantly skyrocket their VOD service miles ahead of the content-poor Watch Now program over at Netflix.
So is this a genius move in the big blue giant’s ongoing battle with their red envelope competitors? Or is it a sign that the former king of video rental is now so weak that it has to outsource innovation? Opinion is split:
Desperate!!!
“It’s a desperate move to shore up Blockbuster’s online failures…[the deal] gives Blockbuster merely a place at the online-video table, not the ability to eat everyone else’s lunch.” — Owen Thomas, Valleywag
“[S]ignals more than a little desperation on the part of Blockbuster … Blockbuster is pretty much admitting they’ve been unable (unwilling?) to develop a home-grown service and so shelled out a bunch of cash (which they don’t have) to buy their way into the game.” — Chris Thilk, Movie Marketing Madness
“Could [be] a last gasp for the once king of movie rentals … [it] may not help since, in a field already crowded with Netflix, iTunes, Amazon and more, Blockbuster is the only one with high operating costs — namely rent on all those brick and mortar stores.” — Scott Gilbertson, WIRED Compiler
“That’s $80 million in losses for the studio investors on their Movielink project, which is money that could have been invested in higher ROI investments. Like suing their customers. This is clearly a hedge move by Blockbuster … [Blockbuster] needs to defocus on Netflix and think about how to use those stores to its advantage. Otherwise, its long term prognosis is clear - deadpool.” — Mike Arrington, TechCrunch
“It’ll be interesting to see how Blockbuster prices the movies for Total Access members. If they continue to charge for the movies, it will give Netflix the advantage in price, but if they give them away it will add an additional expense to the costly Total Access program.” - Hacking Netflix
“Before projecting any increase in market share, Blockbuster’s first assignment is to make Movieline competitive.” — Leo Blanco, 9:01 AM
Genius!!!
“Apparently, Blockbuster isn’t as hopelessly tethered to its VHS rental-business past as you might think … it’s likely a good acquisition for Blockbuster.” John Paczkowski, All Things Digital
“Blockbuster’s acquisition of Movielink makes it a bit late to the IP VOD party, but we get the feeling the goal isn’t so much to break new ground as it is to plant their feet more firmly in their showdown-to-the-death with Netflix.” — Matt Buchanan, Gizmodo
“With this deal, Blockbuster could become the triple threat it’s hoping to be, with mail-in, online and in-store movie rentals.” — Kristen Nicole, Mashable
“Brilliant … All I can say is that Blockbuster is making some very good moves, and I just don’t see how Netflix will compete with them long term unless they also start introducing some new moves.” — John Campea, The Movie Blog
“Wall Street does seem to think that Blockbuster is making a smart acquisition. Shares of Blockbuster gained 3 percent despite the gloomy tape.” — Paul R. La Monica, CNN Money
“Blockbuster’s retail presence should give a boost to the viability of kiosks where back-catalog titles can be burned on demand, giving customers more selection than the inventory at a typical store allows.” — Jackson West, NewTeeVee
Verdict: It’s closer than I would have suspected, but it veers more towards the negative. If Blockbuster were to play every step of this acquisition without a blunder (and that’s kind of a big ‘if’), it would temporarily put them ahead of Netflix in the VOD game. But it still wouldn’t solve those 9,000 brick-and-mortar problems.
Originally posted on:
Spoutblog