Studio CEO: Blockbuster, Best Buy to launch movie download services
Best Buy and Blockbuster are both set to enter the growing movie download business—at least that's what Lionsgate CEO Jon Feltheimer told a bunch of industry analysts during a conference call yesterday.
Context & Ripple Effects
Jon Feltheimer's comments on Lionsgate's analyst call land two months after reports that Blockbuster was close to acquiring Movielink, which already pointed at the chain buying its way into downloads rather than building a service from scratch. A studio chief volunteering retailer roadmaps on a conference call is itself the signal: Lionsgate wants more buyers competing for its digital catalog.
Both claims remain unconfirmed — neither Blockbuster nor Best Buy has announced anything, so the story rests entirely on what one supplier's CEO chose to tell analysts.
First-order effects
- If accurate, Blockbuster and Best Buy move from selling and renting physical discs into direct digital distribution overnight, putting both head-to-head with established download storefronts for the same Lionsgate titles.
Second-order effects
- Studios like Lionsgate gain incremental negotiating channels: each new retail entrant bidding for download rights strengthens the supplier's pricing hand against whichever platform currently dominates digital sales.
- For Blockbuster specifically, a download service would sit alongside the reported Movielink pursuit, suggesting an acquisition-plus-launch strategy rather than organic development.
Third-order effects
- The pattern points toward physical media retailers cannibalizing their own store economics on purpose — accepting that download margins undercut disc sales before someone else does, a textbook case of bundle cannibalization inside the home-video supply chain.
The trend: Brick-and-mortar video retailers are racing to stand up digital download businesses while the studios still need their shelf space, ahead of online-only platforms locking up the market.