Dan Rayburn: 10 years on Blockbuster still lacks a digital strategy

Bricks and mortar video rental chain Blockbuster were a decade ahead of the competition in terms of the move from physical media to digital. That lead, however, “never materialized into any real online video strategy over the next ten years”, writes industry veteran and EVP of StreamingMedia.com, Dan Rayburn.

“Without a doubt, Blockbuster should have been in the position Netflix is in today as they were the first movers in the market.”

Rayburn then goes on to paint Blockbuster as a digital headless chicken.

We’ve seen Blockbuster do wacky things like create in-store kiosks for downloads and their executives have never had a clear strategy for how they plan to take their video business into the digital era. While some might suggest that Blockbuster did have a strategy when they acquired Movielink in August of 2007, the company bought an outdated platform that has yet to be improved upon. The fact that two years after the Movielink acquisition Blockbuster still can’t support Mac users with their video on demand offering shows they are still relying on Movielink’s outdated technology for their digital media strategy.

Blockbuster is not thought of as a company that has any strategy for digital media and every year, seems to come up with some sort of new idea, like kiosks, only to them change their mind a year later. I’ve never met, talk to or read an interview with any executive from Blockbuster that makes any clear case as to why anyone should think of Blockbuster as a digital media company.

Blockbuster’s management talks a good digital game but it’s nothing more than “marketing fluff”, often confusing the company’s dominance in physical media with that of digital, says Rayburn.

As an example he picks over an interview with Kevin Lewis, Blockbuster’s new SVP of digital entertainment, conducted by Cnet. Kevin is quoted as saying, “We are the only entertainment retailer with the ability to serve you a movie where you want, when you want it, how you want”, backed up on part by the recently struck partnership with TiVo.

The problem, says Rayburn, is that TiVo’s living room penetration is nothing to write home about.

“TiVo only has 1.6M stand alone DVRs in the market and Microsoft and Sony combined have sold well over 20M consoles in North America. I love my TiVo, but for Blockbuster to act like having a deal with TiVo is such a big deal, they need to think again”, writes Rayburn.

To that end, “Blockbuster’s service is not available on any gaming console, which is the number one selling device in the home for the playback of digital movies, outside of the PC.” Rayburn also points out that the company’s underwhelming and late to the game set-top box isn’t even being promoted on Blockbuster’s homepage.

In conclusion, he writes:

Sadly, I don’t think Blockbuster will ever be a leader in the digital media arena. While I don’t think it’s too late in the market, they simply don’t have the mentality or the foresight that they showed ten years ago. And while online video movie industry is still in its infancy, if and when Blockbuster gets their act together, I think the opportunity will have already passed them by.

For the full post, head over to StreamingMedia’s blog.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

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