Print This Post

Blockbuster Going Mobile? Why?

questionThere’s no such thing as corporate Darwin Awards or business Razzie’s but when it comes to bad executive decisions or business "say what’s?" it seems there ought be something.

In fairness, there are lots of gambles that don’t pay off, decisions that look much worse in hindsight than they did on the drafting table. As the cliches go: Nothing ventured nothing gained. You’ve got to gamble sometimes. Take some risks. Bad decisions and mistakes, of course, happen all the time. I’m not talking about those. What I’m thinking about are those decisions that fall easily in to the "should have known better"category. Choices that seem to violate common sense. It seems there should be some sort of trophy to acknowledge those kinds of mental lapses in the executive wing. A decision that leaves people scratching their heads and going "watchoo talking about Willis."…that deserves a special Lucite block on the mantle.

Looking back over last weeks events, I’ve got to wonder if management at Blockbuster might be inline for such a nomination. On Tuesday, CEO Jim Keyes, delivered a speech at the Reuters Media Summit. He stood up before a crowded room, asked for a little technical assistance, and then with a few more adjustments, displayed a feature length movie on his Blackberry. As a means of connecting with the audience or making the point that Blockbuster is forward thinking, it was a novel display. But Keyes went on to note that the demonstration was more than a presentation play. In fact, he answered questions and confirmed Blockbuster is "talking with virtually all of the major [mobile] manufacturers" about making Movielink movies conveniently accessible across mobile phones.

If there wasn’t a perplexed hush over the crowd, there should have been. Blockbuster is struggling financially. They lost money for the better part of the last decade. In-store revenues have been suspect and their guns blazing entry into Netflix market for delivered rentals has proven so uninspired that they’ve backed away. Last quarter’s earnings message was they were going to: “strike an appropriate balance between the growth of [their] subscription service and enhanced profitability.” So this is a company losing money quarter after quarter, seeing subscriber numbers shrink, and openly declaring it’s time to get back to the fundamentals and get their core business lines in order. How does delivering feature length movies to portables fit that bill? "Whatchoo talking about Willis?"

For starters there’s the obvious deviation from fixing their core assets or correcting existing problems. This is a distraction (even more so by putting it on the radar at a press event). There’s also a question as to what market opportunity they believe they’ll capture. Much as multimedia phones are becoming somewhat of a norm, they’re not well suited for everything. Internet access? Sure. Access to information is relevant no matter where you are. Music too, that make sense. We’ve been taking music with us for decades- from car radios, to cassettes to CD’s- portable music is something we’ve accepted. But feature length movies? Maybe on the go, in a moment of boredom, you’ll watch a small chunk of a flick to pass the time, maybe spread it out like chapters, but really? Given all the different streams of content being directed at us are we really demanding another become portable? Seems to me, people are accustomed to watch movies with their feet up, popcorn nearby and the biggest screen possible. Part of the joy of a good movie is the suspension of disbelief, getting comfortable and drawn into its world. Watching a 2hr long movie in five minute intervals on a 4 inch screen just doesn’t seem that tempting.

So again, why does a struggling company allocate resources to a questionable market opportunity? What do they put in the spotlight as if its notable? That’s the rub. Sure, having a movie on a blackberry is kind of neat but it doesn’t seem market changing or must-have.

Blockbuster’s desperate. They’re struggling now and they know, sooner or later, over the next decade their business is almost certain to erode. Home movie distribution will eventually take on new forms. This seems an act sourced from that desperation. It feels like a science project, a an experiment. Online downloaded rentals aren’t going happen overnight, nor even be accepted within a year two. It will likely take a while. Blockbuster has some time to fix what they have, to take their pennies on the dollar purchase of Movielink and turn it into a victory. Given that, given everything, chasing mobiles doesn’t make much sense.

Maybe it’s time to send them their trophy. For the Golden Enron, the award for corporate lapses, the nominees are….


Related Articles
Netflix TKOs Blockbuster this Quarter
Netflix Earnings
Blockbuster buys Movielink for Pennies on the Dollar
Movie Rentals from iTunes?
Vudu – video on demand to challenge rentals?
Blockbuster and Netflix Settle Patent Suit

Comments are closed.