Blockbuster’s Jim Keyes promises set top box

November 7, 2008

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.


Blockbuster CEO coming to speak at Forrester Consumer Forum

October 20, 2008

Just sharing some residual excitement after speaking with Jim Keyes, the CEO of Blockbuster. We recently connected in preparation for Forrester’s Consumer Forum next week. Official forum kickoff is next Tuesday, October 28th, at 8:30am. This year’s forum is in Dallas, at the Gaylord Texan Resort — I’ve never been but I’m told it’s big, in true Texas style.  

 Jim is speaking before lunch on the opening day of the forum and we recently got together on the phone to talk about the event and his plans for what he’ll share with attendees.

Bottom line: Jim is psyched about a multichannel future. I won’t steal any of his thunder here, but suffice it to say, he understands that we are in a very early stage of a dramatic change in the way people consume media. 

And he wants Blockbuster to be in the middle of that. It’s an ambitious goal, but it’s also surprising that he has this as his goal at all. I remember talking to retail CEOs in the late 90s, most of whom didn’t understand that their industry was about to be completely revamped. They started dot-com divisions and then guarded their brick and mortar businesses against those dot-coms. It was not pretty.

Fast forward to now, a similar transformation is about to happen to the video industry. We see a lot of early attempts at innovation, from the over-the-top set top boxes to a cool tidbit recently announced by Time Warner in Hawaii where they’ll put Internet connectivity right into the cable company’s digital set top boxes. (By the way, I’m glad they did since I predicted in 2007 that such experimentation would happen by year-end 2008; we were getting close to the deadline there.) But in the end, everywhere access to video will require that single-channel solutions fade into oblivion. Multichannel is the answer, my friend. 

Anyway, I look forward to hearing Jim speak, I’ll be interviewing him on stage. If you’re there, say hello. If not, I’ll blog from the event so you can at least get the crumbs from the table…