After a brief announcement a few weeks ago that was light on details, Blockbuster today announced it would sell what is calls the MediaPoint, a $99 video-on-demand set top box.
As you can see from the graphic, the slim box is made by 2Wire, a company that typically provides products and platforms like broadband home gateways to help TV service providers deliver media experiences to the home.
The attractive pricing is required, of course, as the Netflix Player by Roku came in at $99 earlier this year and has made a splash, reaching what I estimate to be nearly 100,000 unit sales (not yet, but probably by year-end).
Blockbuster is obligated to do the same. But they’ve gone one step further than Netflix in that you don’t actually buy the box. You pre-pay 25 movie rentals and they give you the box for “free.” This counters the claim by any Netflix fans that the $99 box doesn’t come with free content like the Netflix box appears to.
We spoke to Jim Keyes, CEO of Blockbuster back in October and he indicated the box wouldn’t be out in time for the holidays, but apparently he changed his mind. You would, too, if you had to endure announcement after announcement about how Netflix content was available through more and more devices, including PCs, Macs, LG Blu-ray players, Samsung Blu-ray players, the Xbox 360, TiVo, the Roku player, and eventually, your mother’s toenail clipper.
Some quick analysis: this is a good move, it is the right time, and the solution is deftly simple. In fact, I don’t know what would stop people from buying this box and placing it right next to the Neflix/Roku box. From one you get classic movies and TV shows, hours of fun for the whole family (including my kids who watch it nearly daily). From the other you get first-run titles, 25 of which you have pre-paid. Remember: if you wanted to rent 25 DVDs at Blockbuster, you would pay the same amount. This saves you the regular trips to the local store.
Some reporters are making a big deal out of how this competes with Blockbuster’s retail locations. I disagree. Anything that brings you closer to a brand is good news for that brand. It might change the way retail appeals to you — they might sell more products, including Blu-ray players and gaming systems — but it doesn’t mean the store goes away.
One last note: The one risk in Blockbuster’s approach is that it’s device-specific, whereas one of the geniuses of the Netflix strategy is that it’s multiplatform. Can BBuster do a deal with the Sony PS3? That device also has a hard drive, so maybe. But Blockbuster direct to the Net-connected TV would require a streaming model, which this isn’t. So some settling of business models is likely to occur as they contemplate streaming, portable video player integration, and adding HD content. All in all, this is a good move for Blockbuster, as long as it is just the first of many advances.