You Will Probably Never See A Blockbuster SD-Card Kiosk

Here’s an idea: When your top rivals are renting dirt-cheap DVDs from ubiquitous kiosks, or streaming thousands of films as a free bonus to customers who rent mail-order rmovies, what do you do? If you’re Blockbuster, you start a trial run of kiosks that will allow consumers to rent DRM-protected videos on SD cards, and play them back using a proprietary box that will do nothing else. Yeah, that’ll show ‘em.

The new service, Blockbuster Express Digital, will be tested in a few markets. The initial offering will have about 1,000 movies, which is about 15,000 fewer than Netflix offers on its streaming service, which works with TVs, computers and PS3s, and other devices.

Blockbuster isn’t the first company to try to to rent DRM-protected movies that play on proprietary devices. Apple’s been doing it for years through iTunes. Of course, to rent movies on iTunes, you don’t have to go hunt down a kiosk. You can download them to your computer, iPhone, iPod or Apple TV and watch them instantly. How’s Apple doing with that? CEO Steve Jobs calls Apple TV his “hobby,” and when the company released an upgraded version of the box last month, it didn’t exactly take the world by storm.

So, yeah, good luck with that Blockbuster. It’s nice to have a hobby.

NCR, MOD Systems begin digital kiosk download revolution in Entertainment with first technical trial in retail [Press Release]

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  1. MaliBoo Radley says:

    Haven’t they died yet?

  2. jonroknrol says:

    3 Blockbusters in my area are closing. Good riddance.

  3. gtrietsc says:

    Netflix streaming also works on Xboxes, Rokus, Tivos, some non-PS3 BluRay players, etc….

    • MostlyHarmless says:

      @gtrietsc: I <333333 my Roku Box.

      However after seeing the PS3 instant streaming interface, I wish the Roku had some of those features too.

    • masterage says:

      @gtrietsc: Breaking News… PS3 got Netflix last week. Just order up a disc through Netflix. UI is rather nice, and it’s decent speeds. HD quality on HD stuffs…

      • idip says:

        @masterage: Be it that the 360 has offered Netflix for over a year and PS3 for a week and yet the 360 was omitted from the article… Just saying…

        • harrier666 says:

          @idip: From the looks of it, the ps3 UI beats the xbox ui. I can’t handle the 360 netflix streaming interface.

          • Dafrety says:

            @harrier666: I like the PS3 GUI better, but it’s still lacking in a few areas. You can’t hold down a directional button to scroll that way, and you can’t pick movies that aren’t in your list. The quality is also nicer on the Xbox, at least for me.

            • VagrantRadio says:

              @Dafrety: the gui is fine, it’s the limited or crap selection of streaming videos that turns me off from netflix.

              If Blockbuster would offer a streaming service with a better selection of movies and new releases, I’d sign up in a second.

          • Keavy_Rain says:

            @harrier666: I find the PS3 UI clunky and slow compared to the 360 interface. Then again, comparing the 360 interface when the service launched to the PS3 interface now, they’re about equal, which seems to be the norm for anything 360 vs. PS3 in the online realm.

      • YardanCabaret says:

        @masterage: Pretty sure he knew that, you know since it’s in the article. Gtrietsc was just filling in the “other” things it plays.

  4. diasdiem says:

    Yes, let’s release movies in a format that a lot of people won’t be able to use because they don’t have the equipment to read it. That sounds like a sound business model.

    • dohtem says:

      @diasdiem: I have never seen a company that just doesn’t “get it” as much as Blockbuster.

    • Tito151 says:

      @diasdiem: I think this is more modeled at for use at an airport so people can spend a few bucks to watch a movie of their choice on their laptop during a flight.

      • iceykitsune says:

        @Tito151: Movies can only be played on a blockbuster-made box.

      • YouDidWhatNow? says:

        @Tito151:

        After you buy a dedicated player? That only works with this DRM-infected “service”? After you already own a laptop and/or portable DVD player?

        At least Blockbuster is writing an entertaining death rattle story for us instead of just falling over dead.

  5. AHepburnGuy says:

    I guarantee anyone who reads the Consumerist could get Blockbuster competitive again (if not market leader) within 2 years. Where do they promote from in that company? Whoever is taking a crap the next stall down of the CEO gets to be new VP of Operations or something? Jesus. How do you lose a monopoly like they had?

    • CFinWV says:

      @AHepburnGuy: We need a new reality show: “What Not to Do.” A Consumerist panel gets to throw out the old policies and ridiculous marketing campaigns for failing banks and other major businesses. =p

    • pecan 3.14159265 says:

      @AHepburnGuy: I will offer $11 for Blockbuster. Maybe $15 if I get free rentals.

    • sirwired says:

      @AHepburnGuy: The best outcome for Blockbuster right now would be to simply shut down. While that would indeed leave the non-NetFlix, non-BlockBuster folks in the lurch, I just don’t see any way to rescue their business.

      The best outcome for their creditors and stockholders would be to simply liquidate.

      P.S. Blockbuster decided not to tie themselves to the sinking ship that was Circuit City, so give them some credit here…

      • kexline says:

        @sirwired: I’m not even sure it would leave people in the lurch. There are at least three independent video rental places within two miles of my house. All of them survived Lackluster Video’s heyday by finding niches and, um, not sucking.

        That’s in an intown area, but there are still plenty of non-Blockbuster stores even out in the country.

    • shadydentist says:

      @Digitizer: If this is the best they can do for trying, they’re going down in a hurry.

    • cowboyesfan says:

      @AHepburnGuy:

      Their latest CEO came from Southland Corp (parent of 7-11). He dilly-dallied with the idea of buying Circuit City a while back before the went belly up.

  6. Loias supports harsher punishments against corporations says:

    Poor Blockbuster. This is a prime example of what happens to a company that doesn’t stay on the cutting edge of their business: the competition blows them out of the water.

    When Netflix came out, it tooks them years just to create something reasonably competitive. Had it happened BEFORE Netflix became a monster, then maybe they could have survived. But this is a sad attempt to stay viable in a market that simply doesn’t need its services any longer.

    • fs2k2isfun says:

      @Loias: Disruptive technology. The Innovators Solution and The Innovators Dilemma are excellent books which discuss this, but also how to keep it from happening to your business.

    • Toffeecake says:

      @Loias: We actually used to have the Blockbuster mail-in subscription before they crappified it. It was more convenient for us than Netflix because there was a Blockbuster right down the street and we could just exchange the movie in-store without having to wait for the mail. Then they changed it to something like, you could only do that twice a month. We switched to Netflix soon after that.

      What I don’t understand is why they would actually drop an advantage like that; it’s like they were trying to lose customers.

      • Kajj says:

        @Toffeecake: I think maybe they were. It always seemed to me like Blockbuster created their subscription service just to subtract from Netflix’s revenues, not to add to their own.

  7. Coles_Law says:

    I believe this was tried some years ago with the DivX.

    [en.wikipedia.org])

    Granted, this is slightly less wasteful than throwaway DVDs, but not by much.

    • ShruggingGalt says:

      @Coles_Law: THIS

      Thinking the same thing. Did they not learn the lessons made by the former Red Big Box Store?

    • vastrightwing says:

      @Coles_Law:
      CEO: I need something to compete w/NetFlix & RedBox
      Guy: How about a RedBox like thing that puts movies on SD cards. It’s like doing the same thing as both at the same time!
      CEO: Yes! People like Kiosks and media.
      Nerd stock boy: Wait! People don’t want another media to carry around. I say we eliminate media and sell entertainment cheap they can watch/listen to on any device!
      Guy: Don’t listen to him. We compete with NetFlix and Redbox and they both rent media and are successful at it. So people like something to hold.
      Nerd stock boy: No they don’t. The only reason RedBox is successful is because they’re cheaper than the alternatives. NetFlix is successful because they’re convenient. So you’re suggesting making something less convenient and not cheaper than our competition?
      CEO: Exactly! Well done Guy!

  8. t0ph says:

    Off topic, but what’s with the frequency of the posts? 12 before noon and then only 3 in the last 5 hours. A bit more consistency would work better, for me at least.

  9. snowmentality says:

    I said to my fiancé yesterday evening, as we drove past the local Blockbuster, “Does anyone even go there anymore?”

    We saw two guys in there. I guess those are the two customers this SD card kiosk is going to get.

  10. PsiCop says:

    Let’s go over the track record of DRM-equipped on-demand video distribution.

    1. Divx disks (not the a/v codec of the same name): Two words, “monumental failure.” The less said about it, the better.

    2. Netflix Streaming: Requires either a computer, proprietary device, or compatible game console. Not an astounding hit.

    3. iTunes Video: Requires a computer or proprietary device (iPod, Apple TV). It’s a hit, but only with respect to its iTunes market.

    4. DVDs/Blueray: Requires a player, computer, or compatible device. Can be purchased or rented. Was a hit but, is waning in popularity.

    Sorry but I don’t see this as being superior to anything that’s currently available. Disc rental/purchase remains the most viable option, but it costs more than the various streaming schemes. But discs are falling in popularity and companies aren’t making as much on them as they used to.

    I just had a thought. Instead of cooking up new DRM-loaded schemes to distribute movies, as alternatives to discs and what’s already available, how about — see if you can follow me here! — lowering the cost for disc purchase/rental? That’s typically how flagging markets get propped up, and is the usual response under “the Law of Supply and Demand.”

    Yeah, I know, Wal-Mart will be lowering prices on a couple of upcoming DVDs … but I’m not referring just to what amounts to merely a “market test.” I’m talking about a genuine, widespread effort to alter the disc market and make it fundamentally less expensive than it had been. It’s worked with other commodities. Why can’t it work with video?

    • admiral_stabbin says:

      @PsiCop: Redbox has 17,000 locations. I would say it does work with video.

      In the interest of full disclosure, I have never used a Redbox…nor will I make a joke about their name at this moment.

      • PsiCop says:

        @admiral_stabbin: Redbox is a step in the direction of lower prices. But as with Wal-Mart’s very-limited “price war,” it’s not industry-wide. And despite having 17,000 locations, it’s not that pervasive, and nowhere near that useful for the average movie viewer. A few months ago I tried using a Redbox machine, but found no titles I was interested in: Mostly it had only recent DVD releases, maybe a two or three dozen titles in all, none of which happened to appeal to me. 17,000 locations sounds like a lot, but if they’re all serving up the same 30 or 40 titles at any given time, there’s only just so much market share they will ever acquire .. and it won’t be that much of it.

    • Orv says:

      @PsiCop: I suspect NetFlix streaming will become more popular as more non-computer devices support it. Not many people have a computer in their living room, hooked up to their TV. They also need to add more titles, but that’s mostly a matter of studios agreeing to license them.

      I doubt NetFlix is making much money off streaming, but they’re getting a toehold into a market that’s pretty obviously the future of their industry…something Blockbuster failed to do until it was too late.

      • diasdiem says:

        @Orv: I love Netflix streaming. I was able to get rid of my cable, which more than paid for the cost of a Roku player in a couple months. While they might not make money from streaming movies, they’re getting more and more subscribers, many of whom I’m sure are probably watching online movies instead of their mailed DVDs. Less frequent returns gives Netflix a better margin on those monthly membership fees.

  11. Digitizer says:

    Blockbuster is going to try and try and try until they are on top of the industry. I personally don’t think they’re going anywhere.

  12. hamburglar says:

    And with Blockbuster running this, the customer will probably need to bring his own SD card to the kiosk in order to get the movie.

  13. thereij says:

    Funny. The two closest BBV to my house are both closing down and liquidating everything.

    /full disclosure: Jacksonville, FL

  14. Oranges w/ Cheese says:

    @Radi0logy: MUST… HAVE… CONSUMERIST… FIX!!!

  15. SacraBos says:

    Actually, most of the time we go to the Movie Trading Company to rent stuff. My kids like to look at the selection there, which is more fun than looking at your pending list on-line…

    • pecan 3.14159265 says:

      @SacraBos: I hate browsing at a store. I’ve gotten used to sitting at my computer and looking at all the information I need. I can not only read a full description of the movie, I can check out user ratings and get recommendations based on the movie I select. And if I’m browsing Redbox, I can pick a location first and have it only show me what’s currently available. It used to be that I would drive to the store and find that there aren’t any more copies of practically anything worth watching. And with Netflix, I can have access to older or more obscure films. After seeing that Blockbuster (the one time I stepped into one a few weeks ago on the off chance it had something I wanted to watch) there were about 20 copies of “The Marine” – a horrible feature starring a pro wrestler – but barely a classic movie section.

  16. temporaryerror says:

    The post mentions that in order to play the SD cards, you have to use a proprietary box. Does this mean that you would have to buy a separate box to play these on, further cluttering your entertainment cabinet? I read the article, but it didn’t really specify. It would be one thing if you could just plug it into your xbox or whatever (via adapter if necessary) but to have to buy additional hardware is a recipe for failure. Plus, the DRM will surely be cracked within a day of the machines release.

  17. whysthsncnsmrst says:

    Sounds like a program designed by committees of people that have never met each other, nor have talked to actual end users. They are more concerned with satisfying DRM wants than they are with giving needed value to consumers.

  18. Quatre707 says:

    Making things more complicated than they have been for the last 30 years isn’t going to work.
    Why would I go through all of this headache when I can download, or watching streaming, any movie or television should I want at any time I want?

  19. humphrmi says:

    Good lord, they have no idea what they’re doing. Didn’t they hear about DIVX?

  20. Daggertrout says:

    I guess they’re hoping people will be more prone to losing the SD cards so they can charge them for more fees. ;)

    • brainswarm says:

      @Daggertrout: I’m guessing you have to provide your own SD card, but you can always buy one in the store for only three times what one costs at Best Buy.

      • mianne prays her parents outlive the TSA says:

        @brainswarm: Sweet deal! Given that Best Buy is about 4x the cost of Walmart whish itself is nearly twice as much as Newegg!

      • strawberryjam says:

        @brainswarm:

        You do not – this is not just Blockbuster who is doing this too. My store in Seattle is actually a test store for Download2Go as its called in Hollywood Video stores. /full disclosure

        The rental of the proprietary box is 49.99 for 3 months and includes the SD card needed. The SD card is yours to keep at the end. It’s the fastest SD card on the market in that size – which is why you can’t use your own, as download speeds would be slower.

  21. madog says:

    It’s all about the John Madden VHS home delivery service. I forgot it’s exact name and can’t find it on google atm. I want to say he was directly associated with the service, and not just the spokesman but I forget at this point.

    You paid a monthly fee, had a lockbox installed on the outside of your house somewhere, call the service to order your flicks, and they would be delivered at anytime to the little lockbox (just big enough to fit 2 or 3 tapes into). The movie info was in a huge phone-book sized deal that had thousands of movies to order.

    Of course it failed (it was ahead of its time in its function, but too late and probably not popular enough) and of course we still have the lockbox on the side of our house.

    Ahhhh the good ol’ days.

  22. henrygates says:

    Why can’t blockbuster release a DVD kiosk? Why make it difficult and complicated?

    Yeeears ago, when we owned a family video rental store, competition from Blockbuster was slowly killing us so we were downsizing. We were preparing to roll out a smaller store footprint with several computer terminals that let people browse for movies, make their selections, and then pay and pick them up at the register. Unfortunately it went under before we got out of the testing phase, but it’s kind of nice to see that we were on the right track.

  23. MartyCohn says:

    A couple of helpful suggestions for Blockbuster:

    1. People don’t like cash. Make them pay with points that they buy online. Microsoft does it in the wildly successful Zune store.

    2. Put the kiosks in banks and post office lobbies. If you limit the availability to bankers’ hours it adds a cachet of exclusivity in comparison with the lowly red kiosk that’s cheap and ready for business all the time.

    3. Plan for return visits. Increase the price of the rental by a dollar and give the dollar back as credit on a future purchase IF the customer returns the content back to the kiosk it was rented from within, say, 24 hours (but no later than 9 PM on the next day).

    Now there’s a plan for success the Blockbuster way!

  24. suburbancowboy says:

    If it is anything like a Blockbuster B&M store, the entire screen will be filled with multiple images from the same movie (probably Ghosts of Girlfriends Past). There will be no help screen. The good foreign film you were looking for won’t be available, so you will end up grabbing some awful movie out of frustration. Then while you are waiting for 15 minutes to check out, you will be assaulted with ads for Coca-Cola, butterfingers and popcorn.

  25. dvdchris says:

    The entire tone of this post is misleading.
    NCR is test marketing these kiosks while licensing the Blockbuster brand. NCR is the same company Blockbuster is partnering with for the Blockbuster Express DVD kiosks. This is being done with no financial risk to Blockbuster when you look at how much Blockbuster is investing per kiosk.
    This is simply another type of kiosk movie rental system that is being tried. Are companies not allowed to test market ideas? This site or certain Consumerist posters seem to have an anti-Blockbuster agenda.

  26. rpm773 says:

    .@AHepburnGuy: How do you lose a monopoly like they had?

    Assuming Blockbuster had, at one time, the capital to develop the business model Netflix has proven to be successful at, I’d say it’s just a matter of resting on your laurels and not coming up with new ideas to make money. Or, perhaps, cultivating an environment that’s too rigid to chase those markets.

    It’s too late for them now. The posts contained here are about as much notice as this latest nonsensical venture will garner.

  27. Kounji says:

    I remember hearing something awhile back about Blockbuster trying redbox style kiosk.. but I guess that’s all for naught. The execs need to seriously sit down and figure out how to really capitalize on their strengths that do have, and find a way to enhance them.

  28. crutnacker says:

    Blockbuster will find a way to charge you for not rewinding it.

  29. nstonep says:

    I’ll take the high road here…because people in my area miraculously still go to blockbuster (I think they rent kids movies for 99 cents). I only go there to buy used dvds when they’re relatively cheap (4 for 20 or better).

    6 bucks to rent a dvd does not compute in my book even if redbox doesn’t have it. I don’t watch movies on my computer and I’m not sure if hdtvs can actually play movies (versus picture shows) but it’s a possibility. If they can (without hooking up your computer to the damn thing), and the cost is 2 bucks or less then it’s not a bad idea; but I don’t think this is going to “change the game”.

    Gamefly tried the kiosk business as well and priced themselves out of a market with no competitors…it can and does happen with a bad price strategy (i.e. inflexible or pricey).

  30. dragonfire81 says:

    @t0ph: I think the average is maybe 12 stories a day (except on weekends). As long as that is consistent I don’t really care when they are posted.

  31. XTC46 says:

    @t0ph: how about you just pace yourself?

    If you see 7 when you wake up, then read 1 or 2 then come back later (thats what I do becasue of the time differance)

  32. failurate says:

    @Jesse: I’m still a Blockbuster subscriber. There is a store about two blocks away. It was really convenient, and they used to be generous with the “free” rentals, it was huge selling point.
    The generosity well is running dry. I have a PS3 now and will be terminating my Blockbuster account soon.

  33. Marshfield says:

    @Jesse: We were on the 3 dvd a month-one-at-a-time plan with one bonus free and returns to the store for addl free. It was like 5.00/month but I was willing to pay it. Then it got less free and I dropped it like a bad habit. They could still be getting my 5.00/month if they hadn’t been so greedy now they get nothing.

  34. whysthsncnsmrst says:

    @pecan 3.14159265: One would assume that Netflix would assume all of the risk in their first-mover strategy and Blockbuster would just pull a me-too and capitalize off of the idea. However, it seems that Blockbuster is going to cling to failed business models until it is a rotted corpse.

  35. Orv says:

    @whysthsncnsmrst: I think the problem with that theory is Netflix snapped up most of the people who wanted a subscription service, and the energy barrier to switching your subscription to another company is high enough that it’s hard for someone else to break into the market.

  36. golddog says:

    @cmdrsass: Nice. I was thinking of a Die Hard 2 reference but that’s even better :-)