Blockbuster To Close More Stores, But Saves Majority

by Joel Hruska

from: http://hothardware.com/

Dish Network's eleventh hour Blockbuster purchase saved a number of stores from imminent closure, but the company still intends to close additional properties. Blockbuster has spun this into a victory; the company's blog claims to have "saved" stores as opposed to liquidating them.

"We’re pleased that we will continue to operate more than 90 percent of the stores that were offered at auction in April,” said Michael Kelly, president of Blockbuster. “By lowering pricing and offering competitive summer promotions, we’ve brought millions of customers back into Blockbuster stores in the last three months to experience the best in convenience, choice and value. Today, more than 100 million people live near a Blockbuster store.”

“Unfortunately, despite our efforts to reach reasonable terms, some property owners have closed stores,” Kelly added. “However, we’ll continue to look for opportunities for physical distribution in these neighborhoods as we expand our in-store experience, unmatched for movies and family entertainment."

The company originally had some 1700 properties, of which 1500 are currently still up and running. The company's online offerings may have gotten a welcome jolt in recent weeks; Blockbuster has launched a fresh offensive recently in an attempt to lure away customers angry over Netflix's sudden price hike. Last week, the company announced it would offer a combined DVD+streaming access plan with new releases arriving more quickly than on Netflix, game rentals for multiple consoles, in-store exchanges, and no additional charge for Blu-ray rentals. In and of themselves, the perks might not be sufficient to prompt a mass exodus, but it's a well-timed move on Blockbuster's part.

The averted store closings are good news, but we've yet to hear much from Dish on how it intends to integrate the Blockbuster brand into its own offerings. There aren't many linkages between satellite broadcasting and physical film distribution, and no simple way for Dish to convert Blockbuster into a hybrid company while keeping prices competitive with the online-only offerings.

Downtown-Based Blockbuster to Go on Auction Block. The Opening Bid? A Whole $290 Million.

By Robert Wilonsky

From http://blogs.dallasobserver.com/

Blockbuster, which went into voluntary Chapter 11 in September, said in a statement released moments ago that it has agreed to sell to a group of noteholders -- one of whom happened to be named Monarch Alternative Capital, the very same creditors to whom Tom Hicks owed all those hundreds of millions back when he owned the Texas Rangers. The group, called Cobalt Video Holdco, LLC, has agreed to buy the Renaissance Tower-based company for the low, low, low price of $290 million -- which, per Blockbuster, is the opening "stalking horse" bid should others interested in buying the company step forward offering more.

Nothing's certain, at least not till the bankruptcy court in New York signs off on the offer and spells out the bidding procedures. But, insists CEO-for-now Jim Keyes in the company's official statement, this is the best deal on the table:

"By initiating a sale process at this time, we intend to accelerate our Chapter 11 proceedings and move the Company forward. An auction will allow the Company to invite competing bids from both strategic and financial investors. This will also allow for the consolidation of ownership of the Company to those with a clear and focused vision for Blockbuster's future.

"The purchaser will be able to take full advantage of Blockbuster's many strengths, which include an internationally recognized brand name, an exceptional library of more than 125,000 titles, millions of loyal customers, and a multi-channel content distribution platform. Because of its ability to deliver physical content (through DVDs) and digital content (through streaming), Blockbuster can offer customers the unique ability to access any movie, any time."

Blockbuster Has Seen the Future (Again): Renting Movies Via Kiosk for $2 On an SD Card

By Robert Wilonsky in Business News for People Who Don't Read Business News

​Yesterday word started circulating that Elm Street-based Blockbuster had found yet another way to combat RedBox: by offering downloads via SD cards, which users can stick into a kiosk that's loaded with about 1,000 titles from which to choose. It's the second time in a little more than a year that Blockbuster's gone the kiosk route -- last year, you may recall, the company debuted terminals from which subscribers could download to an Archos player for a fee, assuming you had or knew what an Archos player was.

The kiosks are set to debut this week in a handful of Dallas stores for a test run, but some are wondering today why in the why Blockbuster would opt for SD card downloads. As in: "What can't you do with an SD card? I mean, it plays in my iPhone ... wait ... I mean my Blackberry ... wait... In case no one told you, Blockbuster, we can't play this shit back on our digital cameras." To which true believers point out that, look, most netbooks and laptops have SD card slots, so, yeah, not an entirely bad idea. And they allow for full DRM copyright protection. And, as Fast Company notes, "SD cards do represent a marked improvement over DVDs in durability and re-usability, so if they caught on it'd hardly be a step backwards for movie buffs." The pricing, though, is a little questionable: $2 per download ... or a buck more than RedBox. We've got a call into Randy Hargrove, Blockbuster's spokesman; we'll update when he calls back, as he usually does.

Update at 1:51 p.m.: Someone with NCR, the manufacturer of the kiosk, just phoned with an update: Fast Company yesterday incorrectly reported the price of the SD download. The price will not be $4, but $2 ... at least, for now. "This is just a test," he says. "Just a pilot. It's nothing final." And he reminds that Hollywood Video is also testing the kiosk as well. Still waiting on Hargrove.

Update at 4:49 p.m.: In a just-posted interview with Unfair Park, Alex Camara, vice president and general manager of NCR Entertainment, explains the thinking behind his company's partnerships with Blockbuster, which include the SD card kiosks and the self-service Blockbuster Express DVD machines.

Video Killed the Video Store

By Ryan Singel

The Blockbuster is dead, long live the blockbuster.

At least that's what the technology omens are saying.

The Wall Street Journal reported Tuesday that Blockbuster Video, whose shares are trading below $1, is seeking advice on how to file for bankruptcy. Blockbuster counters it's only trying to get help to restructure its debt.

No matter. The days of tromping to the video store to find the night's entertainment are past. Now the question is only how long will it be until walking to the mailbox to get a DVD is considered antiquarian.

Driving or walking to the video store to bring home less than a gig of data — data that may or may not even be in stock — just doesn't make much sense anymore.

At least not when compared to Netflix's easy ordering system, its recommendation engine, lack of late fees, deeper inventory and clever use of the Postal Service to have movies delivered quickly.

Blockbuster tried to keep up, with an innovative mail rental plan that let people trade in movies at the store as well, but the plan turned out to be too complicated and too late.

But even the notion of even leaving the room to get a movie, doesn't make sense if you have a fat internet connection and the willingness to explore some legal and less-legal ways to download movies to a computer.

Note that also on Tuesday, cable provider Comcast announced that it was rolling out "wideband" in the San Francisco Bay Area (including a 50 Mbps downstream offering for $140 a month) and doubled the download speed of its current basic plus service to 12 Mbps down for free. That marks the 10th urban area in the United States that the cable operator is offering real broadband.

Think YouTube, Hulu, NetFlix's streaming movies, iTunes and Amazon overpriced rentals on demand, as well as dozens of others striving — yet again — to find a way to stream Hollywood video across the internet.

On Wednesday, ZillionTV announced that by the end of the year it will sell a $50 internet-connected set-top box that will stream HD and standard movies and premium TV, letting people choose to pay for entertainment or watch ad-supported shows.

No one has created a popular computer-in-the-living room solution yet — which makes DVDs still very practical, but that's just details. Some company — or several — will and then the notion of leaving the house to get a movie to watch will seem as quaint as writing a check at the grocery store.

The only question is what will become of all those old Blockbuster video stores and their signature blue awnings? My money is on an innovative pizza delivery company with a blue logo to start up and take over where the DVD business died.

Because at least so far, the internet has not yet figured out how to deliver a pizza better than a brick-oven pizza place can.

Photo: RocketRaccoon/Flickr

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.