Blockbuster + Circuit City = "Exclusive Content and Content-Enabled Devices"

Blockbuster has recently drawn the ire of movie enthusiasts by inking “exclusive” rental deals with the likes of IFC. The upshot of this deal is that Blockbuster will retain the exclusive physical rental distribution rights for IFC titles for three years after each street date. Why is this important? Because Blockbuster CEO Jim Keyes wants to buy Circuit City for the following reason:

“The combination of Blockbuster and Circuit City will result in an $18 billion retail enterprise uniquely positioned for the convergence of media content and electronic devices,” Keyes wrote. “We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices.

Circuit City was initially unwilling to talk to Blockbuster, but today CNNMoney said that Circuit City has agreed to open its books:

“We are pleased to have reached an agreement with Circuit City to conduct due diligence and further explore a possible merger between our two companies,” said Blockbuster’s management in statement Friday. “We continue to believe this combination would create significant cost and operating synergies therefore unlocking substantial value for our shareholders.”

We have to ask you… are you interested in “exclusive content and content-enabled devices” from Circuit City?

Circuit City opens books to Blockbuster [CNNMoney]
(Photo: northernplateguy )

Comments

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  1. karlrove says:

    “No,” I say as I lovingly pet my iPod.

  2. Uh oh... Cleveland says:

    No.

    Now if it was Vivid and Circuit City…

  3. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    Fuck yeah. Please buy CC, then I can watch you circle the drain *together*!

  4. nick_r says:

    @karlrove: Exactly. There is one company and one company alone that can make us swallow the idea of “exclusive content,” and it’s not either of those.

  5. ShortBus says:

    Sounds like they’re in a big hurry to repeat the spectacular failure that was DIVX.

  6. MikeGrenade says:

    I am totally into closed systems. Especially from ailing retailers with questionable service.

  7. Saboth says:

    I just can’t start my day off right without a big dose of DRM!

  8. B says:

    Two business that suck combined to make one business that sucks. Works for me.

  9. TechnoDestructo says:

    @ShortBus:

    If you mean the ingenious customer-empowering device which was 10 years ahead of its time, then yes!

  10. Pasketti says:

    I don’t shop at either place, so it doesn’t matter to me.

  11. theblackdog says:

    Hell to the no, I would like to actually be able to rent IFC movies from Netflix rather than wait for Blockbuster to play nice and release them for rental, which you know they won’t do unless they make Netflix pay out of the ass for them.

  12. mantari says:

    I disliked this the last time around, when it was called Divx.
    [en.wikipedia.org]

    Sounds like Circuit City didn’t learn its lesson.

  13. heavylee-again says:

    No, not at all.

  14. cametall says:

    DIVX revisited?

  15. consumersaur says:

    It worked for cell phone carriers!

    Wait.

  16. Bladefist says:

    circuit city? is that like amazon? but terrible?

  17. parad0x360 says:

    I would forever stop shopping at CC if this happened due to my utter hatred for blockbuster.

  18. ratsgnawingatmyface says:

    suck + suck = more suck

  19. bohemian says:

    The true sign of a clueless company. Just like Bill Gates thinks people will be willing to pay a monthly subscription to be able to use their OS on their computer. There really isn’t any content someone can hold hostage that will make me agree to nonsense like Blockbuster & CC. I like some of the IFC movies but not that much. There is enough other content in the world between cable & the internet. I will find something else to amuse me. Right now free Japanese TV shows from You Tube seem to be doing the trick.

  20. yaos says:

    Not content with having their own company go out of business, they are trying to get everybody else to go down with them.

  21. fever says:

    This could actually make me get a second job as a Firedog “tech”. Then, CloneDVD + .torrent == exclusive to everyone.

  22. BigElectricCat says:

    Blockbuster, no.

    Film Movement and Greencine, yes.

  23. Content-enabled is a misnomer. It really means restricted-content.

    It’ll be amusing if both go down the drain and wonder why it fails.

  24. humphrmi says:

    Funny how DIVX started out as this great idea, not unlike this one, and ended up as simply a codec to deliver pr0n.

    I hope the same thing happens here.

  25. mantari says:

    @bohemian: One of the true gems with Software as a Service is that now that people are paying a monthly fee for service, you can start populating the service with advertisements, and tell the customers that it helps keep the cost of service down.

    Ongoing subscription also opens the door to advertising.

  26. chrylis says:

    I like content-enabled devices. However, both companies’ histories tend to suggest they’re more about device-disabled content.

  27. chrylis says:

    @humphrmi: Different DIVX. The video codec DivX was ironically named after the lead balloon that was the DVD “rental” service.

  28. Exek says:

    if this goes at least the editors of Consumerist don’t have to worry about job security

  29. privateer says:

    Blockbuster + Circuit City: Two wrongs make do not make a right.

  30. privateer says:

    I couldn’t make my sentence right, either.

  31. clocker says:

    They’d have to call this bastard child “CircuitBuster”, wouldn’t they?

    Please say yes!

  32. citybuddha says:

    Dude, I did some DRM last night.
    I had an awful trip

  33. The Big O says:

    I say that call themselves BlockCity and just sell LEGO!

  34. humorbot says:

    Well if they combine their brick and mortar locations it will make it that much more convenient to not shop there.

  35. humphrmi says:

    @chrylis: I thought that they used the codec to deliver the (rental) content. But it was too long in the past for me to remember now.

  36. I hate Circuit City…lukewarm on Blockbuster.

    I care not for this “exclusive content.”

  37. EllenRose says:

    Two companies I cross the street to avoid, and I’m supposed to lust after their mutant offspring? Neeh!

  38. timmus says:

    Does anyone even shop at these places anymore, besides Grandpa and the assortment of local mouth breathers?

  39. rmz says:

    The Blockbuster/IFC thing strikes me as hilarious because among the movies that Blockbuster will not rent is IFC’s “This Film Is Not Yet Rated,” which is a film entirely about the fact that NC-17 films are often not obtainable from most video stores.

    Kirby Dick probably has a few choice words for IFC right about now.

  40. Thassodar says:

    If they start selling MTX Audio in Blockbuster I’d be all over it. I doubt that’ll happen though, so I wouldn’t really care for the merger. I still wonder if the newly designed Blockbuster stores are gonna fly.

  41. Plankton420 says:

    I only ever go into the evil Blockbuster when I’ve been given a gift certificate there, and I NEVER go into Circuit City anymore.

    If there was suddenly some kind of “content” I wanted but could only get at one of those two stores (or some conglomeration of the two), I would:

    1) still not buy the movie, music or game that I wanted

    2) begin to resent whichever content provider made the exclusive deal with the evil corproation in the first place

    So really, this would be a lose-lose situtation for me and the content provider. (I don’t consider Blockbuster/Circuit City losing here, because they done have my business to lose anymore…)

  42. chrylis says:

    @humphrmi: The original DIVX was essentially DVD with another layer of pointless DRM encryption. When the creators of the DivX codec first came out with it (before it got all commercial), they used the name precisely because it was expected to be used to distribute video such as that which DVD-CSS was supposed to “protect” in the first place.

  43. Lucky225 says:

    Viacom slaves, ewww worst merger ever.

  44. Lazlo Nibble says:

    Once again: God only knows what kind of agreement Blockbuster thinks it has with IFC, but “exclusive physical rental distribution rights” don’t exist under US copyright law. If Netflix legally acquires a legally-produced copy of one of these DVDs, they have the legal right to rent it out. Period.

    There are only two ways Blockbuster and/or IFC can prevent Netflix from renting out these DVDs:

    1) Only sell them if the buyer contracts not to transfer ownership to anyone else…in which case BB/IFC could sue the buyer who transferred ownership of their copy to Netflix;

    2) Don’t sell them at all, so there’s no way for Netflix to legally acquire one.

  45. Imaginary_Friend says:

    Circockbuster.

    I’ll pass. The only thing that could make this unholy union more pathetic is if Sears wriggled into its cobweb covered strap-on and joined the party.

  46. Landru says:

    Maybe it will take them both down. One can only hope.

  47. Ethek says:

    Yeah Divx is dead, long live Divx

  48. madog says:

    I can see it now:

    “Now at at Circuit City!* Rent an IFC** film and get special behind the scene footage and special content only available from Circuit City!***

    *Exclusively available in Online Store only.
    **IFC films only availiable at exclusive Blockbuster stores only
    ***Special footage is only available through exclusive Circuit City branded DVD players that are only purchasable through exclusive, local Circuit City stores only. Offer excluded to any store that is not locally exclusive to a 5 mile radius to your exclusively exclusive home address.”

    Now that’s Exclusive Circuit City Exclusiveness!

  49. ColoradoShark says:

    @ratsgnawingatmyface: Mathematically I am curious about this. If two sucky companies combine are they twice as sucky, sucky squared (4x as sucky), sucky * 1.5? Can suckiness be quantified objectively?

  50. backbroken says:

    Putting Circuit City and Blockbuster together is like putting chocolate and peanut butter together. Only if instead of chocolate you meant a big giant turd. And instead of peanut butter you meant a big giant turd.

  51. mr.dandy says:

    I can’t imagine any content, no matter how exclusive, that would tempt me to use a CC/BB DRM device.

  52. madog says:

    @ColoradoShark: Furthermore, in a physical representation of sucks, what if two sucks occupy the same space at the same time? Will that destroy the universe as we know it? Or does the opposite happen and when two sucks come together a perfect suckless entity appears?

    Mathematically, I think of this more like multiplying a suck by 1. Doesn’t matter what happens because the end result will still suck.

  53. Parting says:

    @chrylis: Eeeeh, and now divx codecs are mostly used in pirate copies on the web. Ouch!

  54. chrisjames says:

    @LazloNibble: The agreement with IFC is probably that all IFC-produced DVDs must be sold to Blockbuster for rental for the first two months; IFC must not sell to anyone else or sell without delivering until the exclusivity period is up. This is legal.

    Blockbuster couldn’t enforce exclusivity even without the help of the law if IFC was selling to other companies like Netflix, because the agreement is, obviously, not binding any other party.

  55. chrisjames says:

    @chrisjames: Okay, I meant to imply that IFC simply couldn’t sell them at all, otherwise my reply doesn’t make sense.

  56. ian937262 says:

    no, I just want my dvd’s. I’ll stick with just the dvd’s from Blockbuster or Netflix

  57. scoosdad says:

    @Imaginary_Friend: or maybe Circuit Buster?

  58. Jean-Baptiste Emanuel Zorg says:

    @LazloNibble: There are only two ways Blockbuster and/or IFC can prevent Netflix from renting out these DVDs

    You missed the third, and most sinister, option: “exclusive content and content-enabled devices” equals DVDs that will only play on specific hardware. Netflix can acquire all the copies they like, but without the proper hardware (available from CC only), you can’t watch it.

    Yes, it’s idiotic, anti-consumer, and destined for the flaming spiral of ignominious death. But intelligence is not a trait that is generally considered highly desirable in senior executives, so stupid moves are inevitable in the long run.

    Both companies will be hurt by this. But I don’t think it’ll be big enough to sink either one by itself. It will just be another small cut along the way to their almost inevitable demise

  59. dotyoureyes says:

    If, by “content-enabled devices,” they mean content that I can watch on any of my devices, sure.

    Somehow, I doubt that’s their plan.

    Would someone kindly explain that Netflix is eating Blockbuster’s lunch because they have unlimited content that’s NOT locked in to a specific device?

    There’s clearly a subscription market for all-you-can-eat movies. With digital distribution, you could theoretically beat Netflix on distribution time. But if CircuitBuster is going to succeed in that space, they’ll have to give up their dreams of also controlling the devices you can watch the movies on.

    BlockCity: You CANNOT build a collection of best-of-breed movie players that suits even 80% of your customers’ needs. There are too many niches to address. Big screen, small screen, laptop, iPod, phone… the beauty of DVDs is that they can be played on all of them.

    Any service/device combination you provide will have to match or beat that ease of use on multiple platforms to even have a chance at succeeding.

    Do you really think you can build that kind of ecosystem? I didn’t think so.

  60. TechnoDestructo says:

    @dotyoureyes:

    I think the smart money is on that being the new euphemism for DRM.

  61. InThrees says:

    AWESOME!

    This will surely convince to stop not renting from Blockbuster and also to stop not shopping at Circuit City!

    Oh wait, no it won’t… and any studio or distribution house who locks their titles into certain hardware quite frankly deserves to not have their material watched.

    I will do my part by not watching it.

    (Unless I can download it.)

  62. SayAhh says:

    The very first thing I thought of when I read the “Blockbuster + Circuit City” title was DIVX (not DivX). HD-DVD versus BluRay? Lame. DVD versus DVIX: now THAT was a battle!

    /sarcasm

  63. Cliff_Donner says:

    Please excuse my ignorance, but I am old and cannot quite understand.

    Somehow, CC and Blockbuster plan to join forces so software (movies) and hardware (DVD or Blu-Ray player) must be purchased together, otherwise you cannot watch said movies?

    @InThrees: Blockbuster convinced me to stop renting from them ‘way back circa ’95. I have never needed to rent movies from Blockbuster. But when the N64 was new, renting the latest games was an attraction that was impossible to resist.

    Except, I was dinged with a “late charge” for a game that I had most definitely returned on time. The crabby manager that I confronted about this problem pulled out some tome of reference that somehow indicated that I had rented said video game, and returned it “late” later that same day.

    I know, it doesn’t make sense. And I didn’t argue the lack of logic at the time, beyond what was necessary to get the charge removed. But I made the decision at that point to never patronize Blockbuster again.

    And I haven’t.

    In spite of the bad press Circuit City has garnered from various sources, including here at Consumerist, because I have’t been personally screwed by then, I’ve continued to purchase from them.

    From strictly my own perspective: Circuit City, please don’t hitch your already flaggin’ wagon to Blockbuster’s clearly falling star. It’s a “deal breaker” for me.

  64. phonix23 says:

    I think this could be a smart move for Blockbuster. Lets face it the era of rental stores is over.

    From here on out Blockbusters profits will dwindle down as Netflix takes a bigger share of their market. Not to mention on demand programming from cable companies is getting better, and eventually products like Apple TV will take more of their market.

    Blockbusters needs to diversify it’s business into other markets now, before it’s to late.

    This could be really bad for consumers but potently stabilize Blockbuster future as an company.

  65. tcarreon says:

    it’s what i imagine watching two dinosaurs mate would feel like

  66. gomakemeasandwich says:

    Ah, AOL-Time Warner redux–except their plan kind of made sense.

    I’m still pissed the Hollywood Video near me closed recently…so much better than Blockbuster.

    Anyway, Circuit City stock, please make it to $6-7 dollars so I can sell you and look like a genius.

  67. gomakemeasandwich says:

    @tcarreon:

    Actually that would probably be more interesting.

  68. gomakemeasandwich says:

    @tolle.7:

    I agree with what you’re saying, but Blockbuster doesn’t have the money to pull off such a deal (especially as they’re just recovering themselves) and the business model is stupid…it just doesn’t fit.

  69. gomakemeasandwich says:

    @Cliff_Donner:

    Hollywood Video did everything better. Their stuff was cheaper, they had a lot more of it, and they had a deal called MVP Movie pass that was an absolute steal if you watch a ton of movies. Plus the people were usually nicer. But fucking Movie Gallery had to buy them and fuck everything up…fuck Movie Gallery.

    Now the nearest one is like 10 miles away in a shitty area :(

    I might check out this chain called “Family Video” that incidentally has tons of porn in the back of the store. Maybe Hollywood Video won’t be such a loss after all :)

  70. jfischer says:

    Suckage + Suckage = Suckage CUBED

  71. HIV 2 Elway says:

    Blockbuster’s dead in the water. This merger is as much about the real estate acquisitions as it is exclusive media content.

  72. Megatenist says:

    You know, I’m getting sick and tired of people bashing BB and Circuit City.They are excellent,reliable stores with A+ customer service,superlative tech support(Geek Squad FTW!)and a quality selection.
    And,furthermore……bbbwaHAHAHAHAHAHAAHAHAHAHAHAHAHAHAHA…..HAHAHAHAHAHAHHAAHAHHAHAHA

    Sorry..I couldn’t keep a straight face anymore

    In closing: BB=suck
    Circuit City=suck
    suck + suck= SUCK!

  73. wildness says:

    @ShortBus: I hate when someone steals my comment thunder :-)

    Yes, I agree that “exclusive content and content-enabled devices” has already failed once at Circuit City with DIVX, so why not try it again and take out both of these monolithic and useless companies.

    As for “exclusive content and content-enabled devices”, if Blockbuster were the only place I could rent a movie I wanted to see, I would sooner rot in hell. Even as much as I love my iPods, I rarely buy anything from the iTunes store.

  74. suzapalooza says:

    @Imaginary_Friend: that is the funniest thing I have heard all week! thank you so much for making me choke on my tea!!!

  75. @bohemian: Srsly. I mean, I get that that’s the direction everyone else is going anyways (iTunes store exclusives, etc) but really I think it’ll be between exclusive and non-exclusive content in the future. Think Youtube v. Hulu, linux v XP. Those who can’t figure out how to make their own devices will be stuck with whatever the suits will tell them to buy.

  76. Valhawk says:

    I just went to my local Blockbuster. They had 5 Wiis for sale. FIVE!!!! People can’t even get them from Toys’R’Us and Blockbuster has FIVE!!!!!!!!!!!!

  77. I just wanted to say: I think this a great merger.

    It’s so contrarian! People have been trying to monetize digital distribution for years now with minimal success. The concept of driving to the store to rent movies is almost as archaic as the concept of buying a physical media player. This business model is built to integrate along a channel this is, supposedly, about to brutally murdered by an onslaught of VOD offerings.

    I have never and will never buy into VOD. It’s too vulnerable to bandwidth-hungry, cash-strapped ISP’s and their nefarious anti-usage policies. Plus, there’s the problem that it’s been difficult to monetize due to the widespread theft of digital content.

    The future is robust DRM. The future is not “no DRM.” If music, movies, etc. aren’t “property” then they aren’t profitable. In that world, CC + BB would be well-positioned.

    Very interesting stuff.

  78. parrotuya says:

    Remember Radio Shack in Blockbuster stores a few years ago? This deal needs to be waterboarded!

    [cache.wonkette.com]

  79. LUV2CattleCall says:

    @privateer:

    Also, as A&F infamously declared, Two Wongs don’t make a White…

  80. LUV2CattleCall says:

    @parrotuya:

    WTF is up with all your retarded “waterboarding” related comments? You managed to spam the post on Chrysler Execs already…

  81. blackmage439 says:

    Meh let them go ahead for all I care.

    I am subscribed to Netflix and I shop at Best Buy, Newegg, and Fry’s.

    I haven’t stepped foot in a Blockbuster in over two years, and I’ve entered a Circuit City maybe twice in that same time frame. I say go ahead with the deal. They’re only hurting the ignorant fools who shop at either place.

  82. Jesse says:

    Only reason I patronize Blockbuster is that I am still locked into the $17.99 3 DVD Rental/Unlimited Store exchange plan.

    Circuit City was run out of town because of Lord Buffett & Nebraska Furniture Mart, so I am indifferent about this.

  83. ekasbury says:

    Not in a million years.