Blockbuster’s video rental box: Too late, too expensive

Posted by Wolfgang Gruener

Opinion – Blockbuster and 2Wire today announced a small set-top box that is designed to stream movies from Blockbuster directly to your TV. Would you choose this service over Netflix? I doubt you will.

Better late than never was my first reaction to the Blockbuster box called “MediaPoint”. The good news here certainly is that, after an eternity of rumors and speculation, this product is finally available (in December). The bad news is that I doubt it will ever catch fire and attract the kind of interest Blockbuster will need to survive in its battle against Netflix.

Here is the lowdown of the box. Initially, the MediaPoint, which is about the size of “two movie theater candy bags”, will be offered for free, if you agree to pre-purchase 25 movie rentals for $99. After that, movie rentals are available for $1.99 and up. There is no free content for those who already subscribe to Blockbuster rentals (“Blockbuster Ondemand”).

The MediaPoint player can be connected to a home network via Wi-Fi or Ethernet and can be integrated seamlessly into home entertainment systems through composite cable, HDMI, component cable, or Toslink.

Is it just me or is Blockbuster shooting itself in the foot here? Let’s check with Netflix: $9 per month buys Netflix users access to unlimited video streaming of a claimed 10,000+ titles. These are not exactly the newest titles, but it is lots of content (inlcuding HD) for sure and a compelling deal. Also, Netflix is available through its own set-top box, Blu-ray players and the Xbox 360 (in HD).

Ok, so Blockbuster Ondemand has the advantage of having newer titles available. But still, shouldn’t Blockbuster have a much more convincing offering? Why isn’t the box rolled into the Blockbuster subscription program which goes for $10 - $20 per month? Very few movies are actually available for $1.99: The competitive advantage, most recent releases, rent for $3.99 a piece. Rent three such movies and you exceed the cheapest Netflix Unlimited plan.

The purpose of such a streaming box is to watch movies, which ultimately means that some users may spend quite some money on rentals: Watch a movie every other day and you will end up with $30 per month in a best case scenario and with $60 in a worst case. This just does not feel right to me. The good news is that those bandwidth caps (check with your ISP) will protect you from watching too many movies.

This can’t be the best strategy Blockbuster was able to come up with. This box needs to be tied to the Blockbuster subscription and needs to offer customers a choice of an all-you-can eat or pay-as-you go model.

Don’t hesitate to chime in: Who has the advantage here – Netflix or Blockbuster? Or do we need something completely different? 

The opinions expressed in this commentary are solely those of the writer.