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 )
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I can’t imagine any content, no matter how exclusive, that would tempt me to use a CC/BB DRM device.
@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.
@chrylis: Eeeeh, and now divx codecs are mostly used in pirate copies on the web. Ouch!
@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.
@chrisjames: Okay, I meant to imply that IFC simply couldn’t sell them at all, otherwise my reply doesn’t make sense.
no, I just want my dvd’s. I’ll stick with just the dvd’s from Blockbuster or Netflix
@Imaginary_Friend: or maybe Circuit Buster?
@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
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.
@dotyoureyes:
I think the smart money is on that being the new euphemism for DRM.
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.)
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
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.
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.
it’s what i imagine watching two dinosaurs mate would feel like
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.
@tcarreon:
Actually that would probably be more interesting.
@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.
@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
Suckage + Suckage = Suckage CUBED
Blockbuster’s dead in the water. This merger is as much about the real estate acquisitions as it is exclusive media content.
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!
@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.
@Imaginary_Friend: that is the funniest thing I have heard all week! thank you so much for making me choke on my tea!!!
@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.
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!!!!!!!!!!!!
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.
Remember Radio Shack in Blockbuster stores a few years ago? This deal needs to be waterboarded!
[cache.wonkette.com]
@privateer:
Also, as A&F infamously declared, Two Wongs don’t make a White…
@parrotuya:
WTF is up with all your retarded “waterboarding” related comments? You managed to spam the post on Chrysler Execs already…
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.
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.
Not in a million years.