Posted by Barry Silverstein on March 25, 2010 11:51 AM
In a classic case of what may be too little too late, Blockbuster is attempting to stave off bankruptcy with mobile movies.
The ailing movie rental retailer announced yesterday that it is offering movie rentals on mobile phones. Currently, a customer can rent and view a movie only on the new HTC HD2 smartphone available through T-Mobile, but the service should soon be available on Android and Windows Mobile phones. It is less likely to be offered on iPhones because of bandwidth issues.
This week Blockbuster confirmed that a deal it had with Warner Bros. will be renewed, allowing the retailer to offer the movie studio's new releases one month prior to competitors Netflix and Redbox. Blockbuster also plans to put 10,000 DVD kiosks around the US by year's end to compete with Redbox, who offers cut-rate DVD rentals via 20,000 kiosks.
The recent flurry of activity signals Blockbuster's last-ditch effort to correct its disastrous course. With $1 billion in debt and bankruptcy looming, Blockbuster is gasping for air. The company expects to close some 1500 retail stores by the end of 2010, which will help. But analysts remain skeptical that Blockbuster can be competitive.
Michael Pachter, an analyst at Wedbush Morgan Securities, told CNNMoney.com, "Asking if Blockbuster can compete with Netflix online is like asking if Best Buy can compete with Amazon online. The answer is no. It doesn't matter how well capitalized you are, if the branding isn't there, you're not going to be able to compete."