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Another Box from Blockbuster

7 Dec, 2008 By: Stephanie Prange

Blockbuster Inc. last month decided to dip its toe once more into the digital delivery box business.

The No. 1 rental chain unveiled a broadband set-top box that allows users to watch video-on-demand movies from the Internet on a TV. The MediaPoint player is free for a limited time with the advance rental of 25 movies, TV shows or other content from Blockbuster On-Demand (previously Movielink) for $99.

What a change from the chain’s last move into VOD boxes!

Back in December of 2002, Blockbuster was coming off an ill-fated marriage with the notorious Enron in the VOD arena. On the front page of the Houston Chronicle Dec. 29, 2002, was a story outlining a fraud investigation of Enron’s broadband business, including tests that included such mishaps as set-top boxes that occasionally caught fire and the venture’s trouble getting the price of the boxes under $1,000 apiece — and that was on top of a $150-per-month charge for the service.

Judging by the new move, Blockbuster executives have learned from past mistakes. Rather than talking endlessly about a box that has yet to prove feasible, Blockbuster, along with manufacturer 2Wire, began offering the MediaPoint device shortly after announcing plans. The price, too (essentially at no charge because consumers get free rentals), is right. At $99 it’s certainly more enticing than $1,000 plus $150 a month for a service fee.

By not trumpeting this move as the next big thing in movie delivery, Blockbuster CEO Jim Keyes is managing expectations carefully.

“Right now we’re mostly interested in understanding consumer response and keeping pace with the emerging technologies available,” he said in a recent third-quarter financial call.

That’s a far cry from the hullabaloo surrounding the Blockbuster-Enron deal when it was first announced.

Under new management, Blockbuster is looking into the digital delivery market, not charging customers an exhorbitant price to do it and is delivering on the hardware.

Perhaps you can teach an old chain new tricks. It just takes new management.

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