aWhiteSandsFilmFestposter, originally uploaded by ellis_neal
Paul Kedrosky has been touting 2007 as what I’ll call the “year of now”:
As I have written here (too) many times, the theme for 2007 remains realtime. Trust me on that one.
If Blockbuster’s recent market gains are any indicator, we’re seeing the early waves hit shore. On Wednesday the company announced that it had met its 2006 year-end forecast of 2 million Blockbuster Online subscribers, in large part due to late gains from the November introduction of Total Access. This new program allows users to return online rentals either via mail, as before, or at one of the company’s brick and mortar locations where one may exchange the movie for another one at the store, then and there.
Like Mike Arrington, I’ve been a long-time Netflix user and a regular at Blockbuster. Sometimes I’ve found new releases difficult to get via Netflix as Mike notes, but often I’m just too impatient to wait for the mail. Plans change, I read something that grabs me, and I’m ready for a movie. Now, not via the pony express. And so, as of today, I’ve switched teams and expect a lighter entertainment bill every month. If you’re in the Netflix camp, consider a move.
The shifting online movie market also got me thinking about the broader retail sector. Multi-channel sales are giving Blockbuster the edge but it’s not breaking news in the more traditional (buy vs. rent) retail world. We’ve seen REI do an effective job over the course of a few years with their in-store pickup program, satisfying those who don’t want to pay for shipping, and incidentally, racking up additional sales (1/3 of pickup customers spend an additional $90 at the store according to a May ‘04 piece). Some percentage of Blockbuster Total Access members, I suspect, are similarly buying candy when they exchange their movies in-store. So what’s on the horizon for further multi-channel integration? Well, I hope it’s in-store digital CRM solutions - the brick and mortar “sign in.” Today that might mean Gates-inspired RFID technology. Someday we’ll have “smart” glasses.
And lastly, what should Netflix do about Total Access? One answer might be “kiosks,” but as we know, and in the true spirit of realtime, they’re gunning for ”the digital download.” It’ll be an expensive endeavor about which we’ll hear more soon, but this week’s film industry digital download DRM announcement bodes well.
Starting December 19, 2006, Blockbuster Total Access (online) is giving customers 1 free video game rental each month plus the first month is free.
Sign up at http://www.blockbuster.com/bbfamily
First month free with promo code 1557TA
Facts:
1. Offer changes to 2-week trial beginning Jan 15 2007. 3 movies out at a time. So, signup now !
2. Members can exchange online movies for free DVD rentals at their local Blockbuster (online mailer/movie will work like a coupon). Also, as soon as the online movies are exchanged at the store, the next movies in your que will ship as well. You essentially double the # of DVDs you can watch by returning them to the store (you can’t do this with Netflix).
3. Members will also receive 1 in store coupon every month for a free movie OR video game (even during free month).
4. Only pay $17.99 per month (3 out) after the 1st month or downgrade to the $14.99 (2 out) or $9.99 (1 out) plans.
Matt,
I must admit, your turn-around on Netflix somewhat surprises me. As a dedicated supporter of the underdog (e.g. Egghead Software, now New Egg), I would have thought that you’d ride it out with Netflix as they roll-out their next generation delivery system.
This jockeying for position between Blockbuster and Netflix amongst others is at best a short-term customer grab as they prepare for the true here-and-now user experience: streaming video. With 3G networks blanketing most metro areas, Verizon’s FIOS (fiber to the house) being aggressively deployed, the massive uptake of Cable and DSL, and WiMax on the way, no-one is going to want to even go to the store let alone wait for the trusty mailman. Comcast and other cable providers have an upper-leg right now with on-demand content, but even they risk being sidelined if and when the content creators smarten up and begin to offer direct sales to customers. I, for one, begrudgingly pay Comcast $150/month for expanded cable (plus internet access) so I can access HBO content. I eagerly await the day when HBO will sell me content directly so I can kill my Comcast package, get high-speed internet access only, and customize my own content menu directly from HBO, Stars, Showtime, and…Netflix.
For example, TBS is currently offering streaming full-length episodes (without ads!!) of their new series “My Boys” (which BTW is not worth watching).
So, the real challenge that Blockbuster and Netflix face is how to get candy to my house in time for my streaming movie!
-Loren
Loren:
Great points re on-demand delivery via cable/telco providers. As distribution methodologies converge over IP it’s going to be an ugly free-for-all. Content creators should benefit as we’re seeing with Netflix’s early moves to distribute independents.
Yes, I’m a fan of the underdog, but not a blind fan. Innovation weighs more heavily than size/odds in my book. Blockbuster and Netflix are two Goliaths at this point and I’ve actually been thinking of Blockbuster as the underdog for some time now.
Re the above commenter, I deigned appropriate to approve as informative. For instance, I didn’t realize one’s online queue would ship immediately upon exchanging in-store, effectively doubling my rental limit. Nice!
Re candy for streaming movies, I’d think Blockbuster/Netflix could do well to partner with FreshDirect/Peapod.
Best,
Matt