Blockbuster Buys Movielink, Zeroes in on Netflix
Thu Aug 9, 2007 8:20AM EDT
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Movie rental behemoth Blockbuster announced yesterday that it has acquired Movlielink—a move that, as Blockbuster's CEO says, "immediately puts us in the digital download business" and robs Netflix of one of its key advantages in the online movie rental battle.
According to the New York Times, the Blockbuster-Movielink deal also includes rights to the movies owned by Movielink owners MGM, Paramount, and Warner Brothers.
It doesn't take a genius to see what's behind Blockbuster's sweeping acquisition of Movielink—one by one, Blockbuster has been matching Netflix's coolest features, starting with its DVDs-by-mail service (which it then improved upon by letting subscribers trade in movies at brick-and-mortar Blockbuster locations), while at the same time hammering the Web-only rental service with an aggressive price war. The strategy has been working; Netflix has begun bleeding subscribers, while Blockbuster's online service has been growing by leaps and bounds (although the price war has cost Blockbuster upwards of $200 million, according to MSN Money).
Now that it owns Movielink and its library of 3,300 movies, Blockbuster can jump right into online movie streaming and digital downloads. Netflix launched its own movie streaming service last year, and it’s a good one (free for subscribers), but the movie rental pioneer never followed up on plans for a digital set-top box for TVs—now that would have been cool.
Is Blockbuster's Movielink acquisition a knockout blow for Netflix? I don't think so—Netflix still has a large and loyal following (myself included), and most of us still want to watch movies in our living rooms rather than on a laptop. Still, once someone figures out a set-top box for instantly delivering (or downloading overnight) videos...well, that might be it.
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Blockbuster Acquires Movielink [The New York Times]
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2 Posted by matt_archbold2002 on Thu Aug 9, 2007 9:43AM EDT Report Abuse
I think a set top box that could be connected to your Tv and stream that huge library of movies would be great. Someone would just need to come up with a way of making the set top box inexpensive. I think this is a big leap for blockbuster, but isn't a "Netflix Killer" it will take a lot more to take down that monster.
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3 Posted by iamnickstahl on Sun Aug 12, 2007 6:46PM EDT Report Abuse
WHy is this so great for Blockbuster? Movielink has never been able to make this model work, and the fact that they are being aquired for 20 million bucks means that this was a fire sale. The problem is that the deals that Movielink has with the studios are ancient in Internet years, and what Netflix offers today by way of an online model is light years ahead both technologically and business-model wise. While I don't disagree that Blockbuster needed to get into this business, buying a weak, tapped out service like Movielink doesn't seem to get them much closer - they'll have to renegotiate all the deals they had with the studios, and frankly I wonder if they'd have been better off doing it themselves. But for 20 million bucks there is little risk, I reckon. I, for one don't believe the magic bullet of a set-top box will do much for this market. I think Netflix's "Watch Now" feature is only going to grow and get better with more content.
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1 Posted by bigcuedaddy on Thu Aug 9, 2007 9:35AM EDT Report Abuse
"Still, once someone figures out a set-top box for instantly delivering (or downloading overnight) videos...well, that might be it." They already have. Amazon Unbox for TIVO.