You might wonder why Blockbuster wants to buy Circuit City for a billion dollars. Here’s the insight provided by Jim Keyes, Blockbuster’s CEO: “We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices.”.
This might sound like a good idea, but in my opinion, it is doomed to fail because:
- Blockbuster continues to be a disc-rental company and the proximity is the main reason why customers go there.
- Electronic delivery and (instant) on-demand movie rental is the future.
- Others will have better “movie boxes”, namelyVudu (review)andApple. Even Windows Media Center PCs might become one in the future.
- Blockbuster isnot likely to get enough exclusive movies
The shareholders are not optimistic: Blockbuster shares are down 16.61% (BBI). But to be fair, they have to try “something”, but I don’t think that this will work.
Filed in . Read more about Thoughts.