Blockbuster Expands All-You-Can-View Plan

Blockbuster has bowed into the Netflix effect…it has launched its own monthly subscription plan that lets customers rent an unlimited number of movies and keep two or three at a time without running up late fees. Blockbuster will charge $24.99 a month for customers to keep two movies out, and $29.99 to keep three titles.

The company, which is about to be spun off Viacom in July, is also planning to launch an online version of the movie subscription service later this year.

Here’s my question: how do you integrate an essentially physical distribution model with digital distribution, and at the same time manage user’s expectations? Right now, this physical DVD unlimited subscription model is fine for Blockbuster, Netflix and Walmart, but when they launch on online VOD service, will they be able to offer the same terms of use? Unlimited subscription for a fixed fee? I doubt it, mainly due to concerns from the studio end, and that is where the disruption will happen…it is upto upstarts like Movielink and CinemaNow to capitalize on that…

Extending that analogy to something happening in the music industry: I’m not talking about CD versus digital downloads disruption, something which industry is in the throes of grappling with, but a problem which will creep up sooner than later: how do you integrate the ringtones/mobile music business with the online music stores and manage user’s expectations, and at the same time, retain some semblance of rational business models? See the next post (above).

My job is asking the questions..the industry has to think about the answers…I have a feeling you could find some answers in the classic “Information Rules

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