One-time movie rental chain superpower Blockbuster Inc. (BBI) is, for the holidays at least, pushing deals on almost everything it now sells, with minimal emphasis on what had long been its core business, carry-out rentals of DVDs.
In a direct marketing piece, also a new tactic for the firm, Blockbuster focuses its acreage on DVD sales, game system sales, bobbleheads, Blu-ray players and discs, and a gift card offer.
The direct marketing piece speaks to the changing business model related to video access options and pricing that have emerged as viable and increasingly widely used alternatives to much older and challenged approaches to physically visiting ─ and later returning rented DVDs ─ to Blockbuster.
The company does make mention of some soon-to-be-released DVD titles and reserves a small space to promote a free, one-month trial to its Blockbuster online option where customers can have Web-ordered titles delivered to their mailbox.
But while Blockbuster mulled changes after its parent sold it off years ago, the likes of NetFlix Inc.’s (NFLX) streaming video site, Roku Inc., appears to have won over the hearts and minds of former Blockbuster customers.
And with movie studios increasingly releasing new titles for video-on-demand (VOD) the same day they can be bought in stories for far higher prices, it’s unclear what, if any role is left for a brick-and-mortar retail chain featuring DVD rentals.
Faster Internet links from telcos and cablecos alike have eaten into the preceding approaches, especially for Internet-savvy demographics. So have the growing list of download-to-own options, and others.
To be fair, as the direct mail piece shows, Blockbuster is about much more than DVD rentals. Stores sell food, drinks, movie posters, used DVDs, candy and movie star figurines.
The piece’s focus on in-home equipment purchases raises core questions as to why consumers would buy consumer electronics from Blockbuster over countless retail chains and membership-based clubs. The clubs typically offer much lower purchase prices than even the largest retail chains.
One possible opportunity for Blockbuster would be to extend its sales of used items, such as pre-owned DVDs to include games, gaming consoles and more. Resale of used gaming systems and games has flourished thanks to the growing availability of GameStop stores, where old equipment and little-used games are converted into cash or credit toward new items.
This would seem to be an increasingly alluring model given the crippled economy and constricted consumer spending predicted for the holidays.
Another option could be to sell the services ─ TV and broadband ─ of service providers whose broadband content delivery has largely supplanted Blockbuster’s once-attractive physical rental of DVDs business model.
