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Summary:

Movie rental chain Blockbuster has taken a lot of heat this year. Netflix dominates the rent-by-mail space (when its shipping centers aren’t down), and Blockbuster’s bid to buy Circuit City was derided by just about everyone. So what’s the company doing to prep for the digital […]

Movie rental chain Blockbuster has taken a lot of heat this year. Netflix dominates the rent-by-mail space (when its shipping centers aren’t down), and Blockbuster’s bid to buy Circuit City was derided by just about everyone. So what’s the company doing to prep for the digital future? PaidContent interviewed Blockbuster CEO Jim Keyes, where he talked about the company’s digital strategy. You should read the whole interview, but here are just a few excerpts.

On Blockbuster’s kiosk initiative:

“The important thing about NCR as our partner is instead of going out and partnering with Redbox or somebody else, we picked a technology partner so that when we deploy a vending machine, it’s a vending machine that turns into a digital download kiosk.”

According to Keyes, the kiosks have a server built into them so customers can choose between getting a physical DVD or a digital download. This physical-to-digital transition is one we encouraged Blockbuster to make a while back, but the company’s digital download options only work with Archos right now, which is severely limiting in this iPod nation of ours.

Plus, the company will have to play catch up with Redbox, which has 8,000 kiosk locations around the country and is prepping its IPO.

On the hot topic of set-top boxes, Keyes said:

“Is there any real urgency for us to go out there and create a whizbang set-top box? No. Are we interested long-term in being in that space? Sure.”

This is actually a smart idea. The set-top box field is already crowded with wannabes; let them duke it out before Blockbuster makes its move. Blockbuster will still have a strong enough brand once the dust settles to make a foray into the living room — especially if it can build on its kiosk strategy.

Keyes went on to talk about Movielink, Circuit City, the idea behind offering consumer electronics at Blockbuster locations and Netflix as competition.

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