Blockbuster Partners with TiVo
Struggling consumer entertainment retailer Blockbuster, Inc. is attempting to create a new revenue stream by
making movies available for download on the TiVo digital recording device. The Blockbuster-TiVo partnership will also make TiVo units available for sale in Blockbuster stores.
According to the Associated Press, Blockbuster will make 10,000 film titles available for download by TiVo users. Rentals will cost $1.99 to $3.99 and purchases will cost $14.99 to $19.99. The fee-based service will make new films available for download ahead of pay-per-view services.
The Blockbuster download feature will be built into TiVo Series 2 and 3 units, TiVo HD and TiVo HD XL DVRs. Blockbuster already has similar deals with Vizio TVs and 2Wire media players, but TiVo is the first mass-market media playing device Blockbuster has enabled for download.
Blockbuster’s announcement follows a recent posting
on the blog of online consumer entertainment retailer Netflix, one of Blockbuster’s chief rivals in the DVD market, saying Netflix would be focusing on improving the performance of its
digital content streaming service this year. Netflix has been expanding its library of titles available for download and the number of playback devices that will accept its streaming content. TiVo also has a content download agreement with Amazon.com, but not Netflix.
Netflix reported a Q4 2008 profit increase of 45%. In contrast, Blockbuster reported a
Q4 2008 profit drop of 14.4%. However, domestic same-store sales increased 4.4%, driven by a slight increase in rental comparables and a large increase in sales of games, game merchandise and consumer electronics. Blockbuster has also recently denied rumors of an imminent bankruptcy filing.
At the end of fiscal 2008, Blockbuster was operating 7,405 stores worldwide, with 3,878 company-owned and 1,599 franchised stores domestically and 1,928 company-owned stores internationally. Domestically, Blockbuster opened 42 company-owned stores and 81 franchised stores during 2008, and closed 169 company-owned and 239 franchised stores. Internationally, the retailer opened 21 stores and closed 161 stores.
