Blockbuster has finally joined the group of companies that have entered the movie set-top box arena with the release of the 2Wire MediaPoint player. For a limited time, the device will be offered for free with the advance rental of 25 films for $99.
Sounds interesting, right? Think again. Vudu already offers the same basic service and the Apple TV allows users to download films directly to the device without a problem. But most importantly, Netflix is bringing its own streaming service to a slew of devices, like the Roku Netflix box and the Xbox 360. The Roku box has been available for months.
And now, as Blockbuster and its brick-and-mortar business feels the pressure from Netflix's mail-order business and countless streaming offerings across the Web, the company is just breaking into the set-top box market?
Call me crazy, but if you're an executive at a company that is clinging to the past and trying desperately to turn a business around that has been hammered from all sides by competitors that offer a more compelling service, wouldn't you want to be first to the market?
I know what you're thinking: Blockbuster did acquire Movielink, which shows the company realizes the future is in streaming. Maybe that's true. But if Blockbuster really understood what was going on, don't you think it would have pushed Movielink more than it did instead of allowing to operate in the same basic way it was running prior to the acquisition? Blockbuster had its hands on the future--streaming--and it let it get away.
But this isn't the first time Blockbuster has missed the boat. The company was too late in realizing that brick-and-mortar rentals weren't what consumers were searching for and paid for that mistake by losing millions and closing hundreds of stores. Blockbuster was late to the mail-order business and watched as its own service was dwarfed by Netflix's and rendered irrelevant even though it tried to beat Netflix on price. And now, it's late to the streaming game and even worse, late to the set-top box market even though a slew of companies around it were jumping right in.
With a stock price that's trying desperately to hit $1 per share and a loss during its 2008 fiscal year of $73.8 million, you would think Blockbuster would consider market dynamics, examine changing economic conditions, and enter into a key market sooner rather than later.
Sure, research and development is costly and it's not always easy for a retailer to get into the hardware business, but lets be honest with ourselves--if Netflix could do it successfully, what should stop Blockbuster?
I applaud Blockbuster for entering the set-top box market, but it's sad that it took the company this long to get there.
Failed management and poor strategies won't help Blockbuster overcome its problems.