Blockbuster (BBI) bought Movielink, a premium video content download service owned by several Hollywood studios. The price was rumored to be $20 million.
The move is almost certainly two years too late. In 2005, Blockbuster might have used the data from its huge subscriber base to sign up customers who could use its stores, DVD-through-the-mail business, and a movie download options. It would have been the most compelling package in the industry.
But, Blockbusters waited as digital cable built a VOD platform and signed up million of customers. It waited while Apple (AAPL) added movies to the iTunes download service. It waited while Wal-Mart (WMT) opened its own movies-over-the-internet service. Then, it waited while Amazon (AMZN) and Tivo (TIVO) launched the unBox.
With its shares down 40% over the last two years, it waited too long.
Douglas A. McIntyre
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