March 12, 2008, 12:00 AM

Blockbuster sees the web as the key that unlocks more multi-channel sales

The web will play a big part in transforming Blockbuster into a multi-channel retailer, CEO Jim Keyes told analysts on the company’s year-end earnings call. Blockbuster also is putting the finishing touches on its digital download plan.

Mark Brohan

Research Director

The Internet and e-commerce will play a big role in helping Blockbuster Inc. make the transition from a DVD rental company into a multi-channel retailer, CEO Jim Keyes told analysts on the company’s recent year-end earnings call.

By the end of the second quarter, customers will be able to log onto Blockbuster.com and purchase movie downloads. Blockbuster also plans to incorporate digital download technology into a pilot test of interactive store kiosks. “We launched a new and improved Blockbuster.com that sets the stage for multi-channel offerings,” Keyes told analysts. “We added an important new dimension with our acquisition of Movie Link in 2007, allowing Blockbuster to provide customers with digitally delivered content to their personal computer, portable device and eventually their television at home.”

Blockbuster, No. 51 in the Internet Retailer Top 500 Guide, also is using the web and a marketing deal with Yahoo to generate more sales online and in stores and will partner with Paramount Pictures and MTV Networks on exclusive digital content deals. “All of these initiatives underscore our determination to position Blockbuster as the only provider of media content across all platforms -- in-store, by mail and by digital download,” Keyes told analysts.

In 2008, Blockbuster also expects to spend about $130 million on capital projects, including about $40 million on information technology and web infrastructure. “Blockbuster is uniquely positioned to be a provider of convenient access to media entertainment across all platforms: in-store, by mail and online,” Keyes told analysts. “As new entertainment technologies emerge, consumer options multiply. All of this means new opportunities for Blockbuster.”

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