Why Blockbuster's Movie Kiosks Won't Fix Blockbuster (BBI)

Blockbuster is facing lots of challenges. How will it survive? One idea the company is now floating: Digital movie kiosks that could someday transfer a movie to your portable movie-playing gadget in 30 seconds.

There’s a lot to be sceptical about: Right now, Blockbuster (BBI) has no content deals, and the trial kiosks only work with devices made by Archos. But let’s pretend the company can get all the studios on board and make its vending machines compatible with Apple’s iPods and iPhones. Then will it fix Blockbuster’s problems? No.

Why not? Because there are very few use cases for a kiosk that rapidly transfers a digital movie to your iPod. It might make sense at the airport, where you can quickly grab a few movies before a long flight. But beyond that, it will rarely be the most convenient way to obtain digital media.

At home, an over-the-Internet movie download like Apple’s (AAPL) iTunes, Amazon’s (AMZN) Unbox, or Netflix’s (NFLX) streaming service makes much more sense — especially if there’s a way to play the movie on your TV. Why would you drive to Blockbuster — or anywhere — to download a movie to watch at home when you could do it from your living room?

And on the go, we imagine that over-the-air movie/TV services will develop/mature just as quickly as Blockbuster’s kiosks. So they won’t help much there, either.

Kiosks might help Blockbuster expand its presence in airports and malls, but they won’t solve the company’s real problems: A declining DVD business, no sure thing from Blu-ray, and no clear strategy for Internet delivery.

See Also:
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The $100 Netflix Box: A Decent Start, But Won’t Change Game

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