So, Blockbuster is talking with Viacom about the media company’s plan to roll out a new premium cable movie channel. The allure is digital.
Big-blue-and-yellow would like to have the exclusive digital rights to programming on the channel, following Netflix’s lead (doesn’t Blockbuster always?) making exclusive deals for DVD movie distribution.
In this case, Blockbuster is looking a few years ahead, buying into the idea that most media consumption is going digital, i.e. downloading. And if BB has the digital rights for streaming and downloading, it will have a competitive advantage.
Blockbuster seems eager to spend money. A few weeks ago, it was an audacious bid to buy limping Circuit City; now it’s offering to put money into a deal that is ‘iffy’ at best.
It won’t happen unless the cable companies pay for it and then re-sell it to their subscribers. It’s worth asking whether, if the world is going digital, and folks are getting savvy about streaming and downloading, will people be willing to pay for what they can get free, either legally or not? (Horton Hears a Who just showed up on Bittorrent sites.)
Blockbuster probably will find a warm reception from the Viacom people. After all, the idea of another pay channel has limited appeal to at least some cable operators. And one analyst, Rich Greenfield at Pali Research things Blockbuster is one of the last companies which should be interested in this deal.