2006 Year in Review: NOVEMBER
1 Jan, 2007
By: Thomas K. Arnold
Blockbuster fires the next salvo in its war with Netflix by creating a new online rental program, Blockbuster Total Access, that gives Blockbuster Online customers the option of returning rentals to Blockbuster stores, and getting free rentals to boot. Blockbuster chief John Antioco says he hopes the program will boost in-store revenue by building foot traffic, and also reduce churn and have a positive impact on subscriber acquisition costs. The Weinstein Co. finds Blockbuster Total Access so appealing it promptly gives Blockbuster exclusive rental rights to all its titles. This doesn't sit well with other rental dealers, including Netflix, who insist that under the First Sale Doctrine they still can buy Weinstein Co. titles and rent them out as they wish. Sony's PlayStation 3 launches on schedule. As expected, the available supply is snapped up within hours of store openings. But the high cost of the Blu-ray Disc drive has driven down the launch inventory to between 125,000 and 175,000 units — down from Sony's original estimate of 400,000 units — much to the consternation of Blu-ray backers who had hoped the hot new game console would serve as a Trojan Horse, propelling their format to an easy and definitive victory over HD DVD. The digital download juggernaut signs up two prominent players, Wal-Mart and Blockbuster. The country's top discount chain offers consumers who buy Superman Returns the option to buy downloads, at a nominal rate, that can be played on their computers, PSPs and other portable devices. It's a precursor to a wider download initiative planned for 2007. Blockbuster, meanwhile, also is eyeing 2007 as the launch year for a download service, possibly in partnership with a cable or satellite provider and using a set-top box.
Blockbuster launches its online rental program, Blockbuster Total Access.