Blockbuster Dips a Toe In the Mobile Stream
Blockbuster, the video-rental chain plagued by debt and unprofitable stores, is placing a bet on a mobile future. — On Wednesday, the company released an application that allows users to watch movies on a mobile phone.
Context & Ripple Effects
Blockbuster has been walking toward this for years under pressure: the Movielink acquisition in August 2007 gave it a download platform, TV streaming was floated by April 2008, and CNET had already run a piece asking readers to say goodbye to the chain. The week before this launch, Blockbuster put new-release rentals on Android and Windows Mobile phones, so Wednesday's viewing app is the second mobile move in seven days.
What makes the timing notable is the balance sheet: with debt and unprofitable stores dragging on the company, every digital channel it opens is partly a hedge on the store network that funds it. The mobile app is small next to that problem, but it is where the company says its future lies.
First-order effects
- Blockbuster now has a direct-to-phone distribution channel alongside its stores, meaning the same title competes across its own physical and mobile outlets from day one.
Second-order effects
- Every rental that migrates to the app erodes store traffic — the cannibalization question that has hung over Blockbuster since it bought Movielink rather than build purely around discs.
Third-order effects
- If the pattern holds, video rental stops being a real-estate business and becomes an app-distribution business, with chains like Blockbuster judged on software reach rather than storefront count — a transition the 2007 obituary-style coverage already anticipated.
The trend: Movie distribution is migrating from rented discs at stores to on-demand apps on personal devices, forcing debt-laden rental chains to chase the shift before their store economics collapse.