Blockbuster releases set-top box with à la carte rentals

By David Chartier

After a handful of rumors earlier this year, Blockbuster has finally leveraged its troubled Movielink service to deliver a set-top box for digital delivery to the living room. Combined with a low price point and a unique introductory business model, Blockbuster may have a shot at catching up with some of its competition.

Dubbed the "MediaPoint" digital media player by its manufacturer, 2Wire, Blockbuster's box can stream roughly 2,000 of the 10,000 films from Blockbuster's online library, which it gained from its acquisition of Movielink in 2007. Unlike competitors such as Netflix, Blockbuster charges no subscription fee for access to its streaming service, opting instead to go with an à la carte model with prices starting at $1.99 per rental. Users have 30 days to begin watching a film and 24 hours to finish once a film has been started.

To get the MediaPoint player, Blockbuster is using an introductory promotion that allows customers to prepay $99 for 25 rentals, and they will receive a MediaPoint unit for free. No standalone price is listed for the unit otherwise, and customers do not need to sign up for a Blockbuster Online DVD rent-by-mail plan.

This pricing model stands in stark contrast to the one used by Netflix, Blockbuster's closest competitor and the company that has so far dominated the DVD-by-mail business and seen reasonable success with an online strategy. In May, Netflix introduced its own set-top box built by Roku, which sells for $99 and allows Netflix subscribers to stream any film or TV episode from the company's much larger online catalog of over 12,000 titles. With a decent lead over Blockbuster in the online space, Netflix has also announced a number of partnerships and updates that now bring its streaming content to the Xbox 360, various Blu-ray players, PCs, TiVo, and even the Mac.

Still, Blockbuster's MediaPoint player and OnDemand service have a number of advantages that cater to users who don't want to pay subscription fees and who are also interested in more recent films. While Netflix's much larger catalog tends to skew towards back-catalog titles, Blockbuster OnDemand focuses on newer releases such as Get Smart, Forgetting Sarah Marshall, and Sisterhood of the Traveling Pants 2.

Blockbuster says its player is "about the size of two boxes of movie candy," and unlike Netflix's Roku player and "Watch Instantly" service, films can be browsed and downloaded right from Blockbuster's MediaPoint player in the living room. (With Netflix, users must use a computer to queue films for streaming on the Roku device.)

The MediaPoint player comes equipped with WiFi (802.11b/g), Ethernet, HDMI, composite, component, and optical outputs. Like Netflix's player, Blockbuster's MediaPoint player is also capable of HD content as well as SD, though it appears neither service is actually streaming HD content to their set-top boxes just yet (Netflix is streaming HD video to Xbox 360 users, though). There is also no mention in the company's press release of what appear to be a USB port and SD memory card slot on the front of the device.

Finally showing a little more feistiness after getting pummeled by the competition lately, Blockbuster isn't stopping with its own media player, either; the company is negotiating to get its OnDemand streaming service onto Blu-ray players, and it's also considering a debut on the Xbox 360 or Playstation 3, according to Reuters.

Competition is escalating in the online video space. MGM is bringing full movies to YouTube, Hulu streamed presidential debates live, and following its flight to Windows PCs, TiVo today went so far as to introduce a mobile site at m.tivo.com that allows subscribers to browse and schedule shows while on-the-go. If Blockbuster can increase its MediaPoint catalog and flip the switch on HD, it could gain some ground in an increasingly crowded online video market.