The Digital Home

Broadband-connected TiVo DVR subscribers have access to Blockbuster's long-awaited OnDemand rental service, TiVo announced on Tuesday.

The service is available to owners of TiVo Series2 and TiVo Series3 digital-video recorders (including the TiVo HD and TiVo HD XL).

According to the company, users will be able to stream films ranging from new releases to classics. Users will be charged $2.99 for classic hits and $3.99 for new releases. Blockbuster will be adding more films over the coming weeks, including "select HD titles."

As part of the agreement, Blockbuster will also begin selling TiVo DVRs in "thousands" of participating Blockbuster stores around the United States.

Blockbuster OnDemand's arrival on the TiVo (and TiVo's arrival in Blockbuster stores, for that matter) has been a long time coming. The partnership was first announced in March.

Whether Blockbuster will enjoy success on the TiVo is up for debate. The company's main competitor, Netflix, is already streaming films and television shows to TiVos for no additional fee beyond the company's unlimited-plan charges. Amazon Video On Demand is also available to TiVo users, and like Blockbuster, it, too, allows them to purchase individual videos, rather than pay a monthly subscription fee.

TiVo owners can also access content from YouTube, as well as films through Jaman and CinemaNow's Disney.

To access Blockbuster OnDemand, users will first need to create a Blockbuster account. Once complete, they can access Blockbuster OnDemand content from the TiVo's video-on-demand menu.

Although it has no immediate plans to do so, online video rental service Netflix is hoping to bring its video-streaming service to Sony's PlayStation 3, Nintendo's Wii, and Apple's iPhone, CEO Reed Hastings said in a recent interview with Reuters.

Hastings told Reuters that his hope is that Netflix's streaming service will eventually "be on all the game consoles, all the Blu-ray players, (and) all the Internet TVs." But as Hastings pointed out, his company has signed a deal with Microsoft to deliver Netflix streaming exclusively to the Xbox 360 in the video game space.

The chances of that changing anytime soon are slim, though Hastings said his company is "working in parallel" to achieve his goal of bringing Netflix streaming to all the aforementioned devices. While Netflix is likely to offer such a service on the iPhone and iPod Touch "over time," he said there is little chance of Netflix video streaming becoming available in the App Store "in the short term."

Despite rumors indicating that a Netflix app is already on its way to the App Store, Hastings would not give a timetable: "(With) movie watching, we are not focused on mobile yet, but (instead) on the TV, on Blu-ray, and on the video game consoles. We will get to mobile eventually, including the iPhone."

Hastings also chimed in on the recent announcement that Blockbuster might be closing up to 960 retail locations. He told Reuters that the closures "don't really benefit" Netflix.

Netflix's focus, Hastings, said, is on streaming video and maintaining a big catalog of available titles. Blockbuster, he said, "competes on doing the inexpensive new releases." He said Redbox would be the company that would benefit most from the closure of Blockbuster stores.

A Securities and Exchange Commission filing has revealed Blockbuster's plans to close up to 960 retail store locations by the end of 2010 as it attempts to makes its operation more financially stable.

According to the company's filing, it plans to close all unprofitable stores, while refocusing its efforts "to improve four-wall profitability." To do so, the company first analyzed its over 7,000 stores to determine if they were profitable or not. A whopping 18 percent of Blockbuster's stores are unprofitable. The remaining stores are profitable.

Prior to making the decision to close some of its unprofitable locations, Blockbuster planned to close 280 to 300 stores as part of a grouping it calls, "normal closures." Stores added to the "accelerated closures" category will also be closed by the end of this year. According to Blockbuster, the number of accelerated closures will equal 300 to 385 locations.

Next year will be a slightly less active year for store closures. Blockbuster indicated in its SEC filing that 2010 will bring 100 to 125 normal closures and 130 to 150 accelerated closures. By the end of 2010, it expects to have closed 810 to 960 retail locations.

As troubling as that might sound, Blockbuster spokesperson Randy Hargrove said in a phone conversation that a certain amount of measured skepticism should be exercised. According to Hargrove, these figures are not guaranteed.

"All these stores are candidate stores," Hargrove said. "Although we may in fact close that many stores, if we can renegotiate leases or remodel stores to make them more profitable, that number might go down."

But Blockbuster's closure story doesn't quite end there. Further down in the filing, Blockbuster indicated that 275 to 300 stores are subject to the company's "lease mitigation/termination efforts." Another 250 to 300 stores might be converted into outlets. If successful, that would bring Blockbuster's grand total of rental store closures to 1,335 to 1,560, or up to about 22 percent of all the stores currently in operation.

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After inking a deal with Samsung last month to deliver movies directly to your home, Blockbuster announced on Tuesday that its OnDemand service is also coming to your mobile phone.

Blockbuster OnDemand, to be available on "select" Motorola mobile phones, will provide users with access to "thousands" of films, the company said in a statement. Users of the upcoming application, whose release date is yet to be announced, will also be able to choose films for home delivery or reserve titles for in-store pickup.

According to Blockbuster, the Motorola deal is yet another element in its strategy of providing consumers with options to get its movies anywhere, at any time.

For its part, Motorola believes that offering Blockbuster movies on its handsets will help it regain some of its appeal. The company once sat atop the mobile-phone industry. Today, it's a shadow of its former self. And it's trying desperately to regain some market share.

That might be coming through Android-based devices. Motorola has already signed on to deliver Android phones. Blockbuster's app might become a component in that strategy. But by competing with the iPhone and its many multimedia capabilities, Motorola and Blockbuster will be facing an uphill battle.

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When Netflix announced on Monday that it has decided to raise the subscription prices for those receiving Blu-ray Disc titles--10 percent of its subscribers, according to the company--the predictable occurred: people lashed out, saying Netflix is gouging customers.

In case you missed it, the new fee structure tacks on $1 per tier of the plan you're on. So if you have a one-film-at-a-time plan (two-movie allowance per month), your monthly cost has risen from $4.99 to $5.99. If you want three films at a time (unlimited movie allowance per month), your cost has risen $4, from $16.99 to $20.99. Fees are up substantially on other plans too.

Predictably, many looked at the announcement as Netflix capitalizing on consumers. Those who are upset with the release say the increase is too high. And since Netflix doesn't need to pay for packaging, and it probably gets a discount on media, given the number of copies it needs, they believe that the company is gouging customers.

I contacted Netflix for comment regarding this contention. A representative responded to me within a few minutes. He said the cost of Blu-ray discs is 30 percent higher than that of DVDs, and more of the company's customers are switching to Blu-ray, generating higher operating expenses. A $1 additional charge for Blu-ray access on all plans wasn't cutting it any longer, he said.

The representative then directed me to the company's official blog post on the matter for more information. So after all that, we still don't know how much Netflix pays.

But regardless of the motives behind this deal or the fact that some people are upset, we can't look at Netflix pricing in a vacuum. Quite the contrary, we need to compare its pricing to the competition to determine if it's still the most affordable option on the market.

Much to my surprise, Netflix might have committed an incredible blunder that it needs to address immediately: Blockbuster brick-and-mortar stores now have the more affordable option for standard Blu-ray rentals.

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Blockbuster and TiVo announced a deal Wednesday that will make between 5,000 and 10,000 films available to TiVo users. Customers will be able to rent ($4) or buy ($20) films, including current major titles. It's about time: Netflix and Amazon's on-demand services are already available on TiVo. Netflix offers approximately 12,000 older and less compelling titles on the box, but Netflix users don't need to pay anything beyond their monthly fee to access movies on the DVR. Those who want to use Amazon's service, which already offers most of the films Blockbuster will stream, pay about the same rental fees as Blockbuster will charge.

I've called Blockbuster to task on its late release of contemporary technology, but I wanted to give the company a chance to respond, so I discussed what I consider Blockbuster's shortcomings with its newly installed senior vice president of digital entertainment, Kevin Lewis.

Lewis contends that his company is more than just a movie rental chain. He says Blockbuster is an entertainment retailer, which is why it wanted to make its service available to TiVo users.

"We are the only entertainment retailer with the ability to serve you a movie where you want, when you want it, how you want," Lewis said. "Whether it's at one of our stores, through virtual kiosks, or via downloads on a box like the TiVo, we can provide you with the most robust service." He told me that unlike Netflix, Amazon, and any other competitor, Blockbuster has the opportunity to service its customers across multiple channels, making its deal with TiVo all the more compelling.

"We recognize that our consumers don't act the same way every time because their needs are different," Lewis said. "Because of that, we plan to go wherever the consumer goes. And although Netflix and Amazon are already on the TiVo box, when we get there, users will know that we're the only company of the three that can offer them a movie no matter how they want it. Our competitors don't have that multi-channel capability. It's our special sauce."

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In this episode, Don takes a look news out of Blockbuster, Apple, Microsoft, and more! After that, he sits down with Vudu to discuss the film streaming business and ends the show with a discussion Twitter.

And as always, follow Don on Twitter!

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EPISODE 46

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Blockbuster has finally joined the group of companies that have entered the movie set-top box arena with the release of the 2Wire MediaPoint player. For a limited time, the device will be offered for free with the advance rental of 25 films for $99.

Sounds interesting, right? Think again. Vudu already offers the same basic service and the Apple TV allows users to download films directly to the device without a problem. But most importantly, Netflix is bringing its own streaming service to a slew of devices, like the Roku Netflix box and the Xbox 360. The Roku box has been available for months.

And now, as Blockbuster and its brick-and-mortar business feels the pressure from Netflix's mail-order business and countless streaming offerings across the Web, the company is just breaking into the set-top box market?

Call me crazy, but if you're an executive at a company that is clinging to the past and trying desperately to turn a business around that has been hammered from all sides by competitors that offer a more compelling service, wouldn't you want to be first to the market?

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In this episode, Don Reisinger explores why Apple is full of it and sits down with Guy Kawasaki to discuss his latest offering: Alltop.com
Listen now: Download today's podcast

EPISODE 35

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