Blockbuster Inc. has signaled its interest in entering the movie download business, possibly sometime in 2007, according to comments made by CEO John Antioco at a Reuters media conference in New York last week.
The DVD format will rule the movie rental roost for the near term, especially as high definition TVs become more common, Antioco says. But Blockbuster “can’t afford not to be in it," he said.
Blockbuster declined to comment on whether there is a timetable on such an expansion.
Antioco predicted movie downloads sales will near $1 billion by 2009, still less than one-half of one percent of overall film industry revenue.
The company, No. 70 in the Internet Retailer Top 500 Guide to Retail Web Sites, could do so through its ownership stake in CinemaNow or via an agreement with another digital entertainment service.
Antioco believes that consumers will accept a TV set-top box if that’s perceived as the best way to download movies and other content.
Blockbuster expects its storefront locations to shrink from some 5,400 to 5,000 in the next two years, but online rentals will fill the void, Antioco noted.
Blockbuster will be competing head-to-head for the download business with rival Netflix Inc., No. 21 in the Internet Retailer Top 500 Guide to Retail Web Sites.
In 2007, Netflix will invest about $40 million in new technology that enables customers to download movies from the Internet. “We plan to significantly accelerate our spending on digital downloading in 2007 from less than $10 million this year to more than $40 million next year,” Netflix chief financial officer Barry McCarthy recently told Wall St. analysts.
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