Blockbuster’s Jim Keyes promises set top box

If you’re a faithful reader of this blog you know that just last week in Dallas I had Jim Keyes, CEO of Blockbuster on stage at our Forrester consumer forum. He gave a great speech with amazing detail. But one of the things he was clear on was this: Blockbuster wasn’t going to do a set top box this year. I pressed him on this in Q&A and he said that consumers weren’t ready for it — it was a case of “getting ahead of our headlights” to quote his exact colorful speech.

It appears that set top box question has been reopened. In a conference call with Wall St yesterday, Keyes said that a set top box would indeed be out by year-end.

Either Jim was playing hard to get last week on stage, or, rather, Blockbuster has seen the aggressive announcements from Netflix in the past two weeks and concluded that it cannot afford to let Netflix get too far ahead in this race.

If that’s his thinking, then I agree. We actually urged this kind of thinking back in our July report on the future of the set-top box. We said then that most of these boxes were doomed, but that they were important to invest in anyway. We wrote:

Even following our suggestions, the best that the most successful of these players will do in the short run is to sell 2 million boxes. Our money is on the Netflix/Roku box, as it has the fewest barriers to adoption and sufficient functionality to appeal to consumers’ desires — especially if it rapidly evolves to include more content and additional services. Without modifications to create more appeal and overcome major barriers, we expect the others will all fight to surpass a million — and most will do far worse. For those that do eclipse a million, is it enough to get the foothold they’re shooting for? Yes. But their mistake is in thinking that the foothold that matters is the device’s penetration. It’s not. It’s actually the penetration of the video service that the device features, as the ideal scenario for future take-up is one in which a viewer has a content subscription that is accessible from multiple devices.
source: Competitive Product Ranking: Picking a Winning Set-Top Box, 17 July 2008. 

That’s the key. It’s getting the Blockbuster service into people’s homes, much the way Netflix is doing with its multitude of announcements. So even if Jim didn’t tell us the whole truth, we’ll still approve of where he’s headed. Of course, we have no details on how he’ll do it. If he follows through on the subscription model he hinted at on stage, that will be intriguing. Stay tuned.

Web stream of my speech at the Forrester Consumer Forum

Imagine my surprise to find out that one of the bloggers on the front row of the Forrester Forum streamed my keynote speech live. You can see the archive of the stream here. It begins with Carrie Johnson’s kickoff to the forum and then at about minute 11, she introduces my keynote. It’s not the best quality image or audio, but if you’re really interested in the speech, here it is in its glory.

more about “Watch the stream of my speech at the …“, posted with vodpod

What is a Convenience Quotient?

A Convenience Quotient (CQ) is something we debuted today at our Forrester Consumer Forum in Dallas. It’s a new metric we have devised to summarize how convenient your product/service/channel is to consumers. In concept it’s straightforward:

Convenience = Benefits – Barriers

Basically, the convenience your product offers is a function of the benefits you offer minus the barriers that stand in your consumers’ way. If you offer tremendous benefits, people will overcome great barriers to get at them. If you offer modest benefits, even the slightest barrier will stand in your way. An example I offered today in my speech is depicted below in the slide (which you can click on to see a bigger version of).

 

A slide from my presentation at the Forrester Consumer Forum

In this example, you see the way the CQ works. You start from 0, you add up the benefits you provide (that’s the tricky part, obviously, and we’ve developed an approach to doing this which will show up in our research) on a scale from 0 to 1. Then you subtract the barriers that stand in your way. If you end up with a positive score, it means you have more benefits than barriers whereas if you end up with a negative score, well you know that negative scores are never good.

This example shows how CQs might work in the case of a banking website when a customer needs help with a serious issue (lost ATM card, missing deposit, etc.). I ran through sample scores that different alternatives might have: FAQ = 0 (few benefits, few barriers, cancel out); email = -.2 (many barriers, uncertain benefit); 800 number = .05 (some barriers, decent benefits); online chat help = .2 (many benefits, few barriers when done right).

It’s an important concept that we’ll be developing more fully in our research over the next year and I’m already getting smart questions and comments from forum attendees about it, so look for me to talk about it more on this blog as it relates to video entertainment.

Jim Keyes, Blockbuster CEO, taught me 5 things

I’ve been around the block a few times. By that I mean I have been to more than a handful of big conferences where CEOs talk about why their companies are the cat’s meow. And many times, these CEOs disappoint, falling into the role of simple cheerleader for their brands. We work hard to make sure Forrester Forums escape that pit, but it doesn’t always work.

That’s all in preamble to what I just heard from Jim Keyes, CEO of Blockbuster, who delivered. He took the stage for 45 minutes and told this audience the nitty gritty details of what it’s like to take a company many people have pronounced dead and transform it into a leader.

Jim sold me. Here are five important things I heard from Jim about the future of entertainment:

1. One customer, many channels. Jim made a compelling case that Blockbuster is the company best positioned to have a true multi-channel entertainment offering: rental, purchase, kiosks, digital downloads, even a set top box strategy which he publicly acknolwedged but indicated would not happen this year. No competitor has the same opportunity to deliver through all possible channels to all possible devices.
2. The over-the-top set top box business is not there yet. This is probably why Steve Jobs keeps publicly referring to the Apple TV as a “hobby.” While Jim acknowledged that Blockbuster will offer the same kind of product, when I asked him in Q&A to go in more detail, he said that these boxes are ahead of the customer right now and it doesn’t make sense to get one out there just to have one out there. He could subsidize, like he thinks Netflix is doing, but it didn’t make sense right now.
3. Convenience is king. Putting aside for a moment that in the entertainment business, content is the real king, when it comes to the companies who want to deliver entertainment, convenient access to content is what matters. Jim discussed in great detail (including assumptions about pricing and consumer strategy that were alarmingly frank for a CEO speaking in public) about the business model implications and challenges they face in trying to make access to content convenient. Oh, and he used my Convenience Quotient model from earlier today, so of course I liked it :)
4. Change is best when it comes from the top. One of the questions we get at every one of our events is, “how do I drive change in my organization to participate in this digital revolution?” Jim led his speech by saying he had a great opportunity if he could “inject change.” So I took the opportunity to ask him just how he planned to do that. His answer was as detailed as all his other comments, but the short of it is that he personally takes the responsibility to inject change, including communicating to every store manager each week. That way he can personally infect them with his own enthusiasm and ideas for the company’s future.
5. You can’t get too far ahead of your headlights. Those were Jim’s words in response to me asking him the question about whether he’s actually innovating too fast by trialing kiosks and multi-channel experiences. He admitted he might be ahead of consumers just a bit, but was willing to experiment. As long as, he then confessed, that he didn’t get ahead of investors. I think that’s a lot of what is going here: Blockbuster isn’t just managing to customer’s expectations, but to Wall Street’s as well. From what I see, Jim is doing a good job of both. 

As you can see, I’m impressed by what I saw. Jim’s a guy who knows what he’s up to. If Blockbuster is going to turn itself around, I can’t imagine anyone more prepared to do it. More from the forum as it unfolds.

Cameron Death of NBC on stage saying good things

Welcome to Forrester’s Consumer Forum, in Dallas. We’re off to a bang, I have just finished my keynote speech a few minutes ago and now Cameron Death, VP of Digital Content at NBC Universal is speaking.

He put up a slide that I didn’t get to capture with my BlackBerry in time, but it showed the number of people who caught the Heroes season premiere. It was something like 24 million in broadcast (probably including DVRs), 8 million online, and just about 126,000 people in mobile and VOD. Just 126K! Online is hot, the rest is not. (Now if only Heroes had been as good as it was in season 1!).

He is so refreshingly open! My experience with TV execs is that they are very guarded. Perhaps because Cameron is an ex-Microsoft guy who has only been at NBC for a year, he is talking very openly about ratings, DVRs, and other challenges. And he’s very optimistic. Perhaps it’s because NBC is doing very well right now in the online space. NBC’s joint venture with Fox, Hulu.com, is a roaring hit. NBC is having a huge rush online thanks to Sarah Palin/Tina Fey. 

In fact, in a very surreal moment, Cameron read from today’s USA Today which was delivered to his hotel room here at the Gaylord Texan.  He quipped, “it’s interesting there are numbers in here, because I wasn’t given permission to share these numbers, so I’ll just quote USA Today!”

Not only did SNL get its largest TV audience (15 million) in 14 years for the October 18 broadcast with vice presidential candidate Sarah Palin watching Tina Fey impersonate her, but Palin-related SNL skits have been viewed more than 63 million times across the Web… – October 28 paper, Section D, page 1 (update note: originally had incomplete quote here, replaced it with full quote once I had a copy of the paper)

Cameron pointed out that this is clear evidence the digital channel matters, driving not only online activity that dwarfs the broadcasting viewing, but also lifts the broadcast viewing itself.

The forum is shaping up well. I’ll prepare a summary of my speech a little bit later, with some screen shots because there’s some good stuff in there worth talking about. If you want to follow the forum on Twitter, follow “forrester.” I’m also twittering at jmcquivey.

Forrester consumer forum, sneak peek at my speech

Well, not all of my speech, I have to save something for the attendees, after all. But I recently had a great conversation with David Armano (VP of Experience Design with Critical Mass, and blogger responsible for Logic + Emotion as well as a contributor to Advertising Age’s DigitalNext blog) and shared with him the basic pieces of my keynote speech which I will give to 600+ people tomorrow morning in Dallas.

David blogged about the speech, connecting to the element he found most interesting, that was my focus on convenience as the path to meeting consumer needs. That’s actually the theme of my speech:

People share a set of universal needs – satisfy those needs with convenience and you will win

It’s something we’ve arrived at after ten years of solid Consumer Technographics research, and I’m excited to be able look back at the data and find evidence of the role of convenience in making products, services, and channels successful.

Hope to see you there. If not, look for my blog posts about the event starting tomorrow and into Wednesday.