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Blockbuster Eying Downloads in 2007

28 Nov, 2006 By: Erik Gruenwedel

Blockbuster Inc. is reportedly ready to join the movie download business with a partner in early 2007.

The Dallas-based rental giant's chairman and CEO John Antioco Nov. 28 told the Reuters Media Summit in New York that movie downloads would represent about $1 billion in revenue by 2009 — a fraction of total Hollywood revenues.

He said Blockbuster remains bullish on packaged media — despite the media hype on electronic sellthrough — largely because the studios control the release windows for theatrical, DVD, pay-per-view, cable and electronic sellthrough.

Antioco said the newness of downloading, combined with broadband and time requirements needed to acquire content, would hinder widespread adoption and have little impact on the nascent high-def DVD market. That said, he believes electronic sellthrough is a distribution channel the company can't ignore for competitive reasons.

He said Blockbuster would either partner with an established download service such as CinemaNow (which Blockbuster is an investor) or with another service.

“We think packaged media remains king for a long time,” Antioco told Reuters. “[But] we can't afford not to be in [downloads].”

Separately, Antioco confirmed Blockbuster was in talks to sell portions of its international operations, including Taiwan. In addition, he said the company would shutter up to 400 Blockbuster-owned stores (to 5,000) in the next two years.

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