Blockbuster is taking the only logical step left to save it’s business. As I wrote about already, the online film rental market is not there yet and the opportunity is open for someone to take the lead. I think Blockbuster is taking the right road with a hardware box, but it remains to be seen what the user experience is. They may be building upon the Movielink service they purchased but Movielink was never a very good service and was saddled with lots of arcane DRM. This will surely doom the service unless they have changed things.
In general I don’t trust Blockbuster to pull of either the hardware or the service. It’s not what they do and unless they have a very good partner to help them, I foresee failure. If they can put more pressure on Apple, however, to get more movies on iTunes or Netflix to accelerate their online initiative, their effort will be worthwhile for end users.
It’s funny to read statements in the article like Blockbuster needs to be careful not to canabolize their brick and morter business. That’s old school thinking. That business is already dead. The best way to survive in a changing world is to put yourself out of business before someone else does. Blockbuster does have a strong brand name and a window of opportunity here to make the leap. Are they savy enough to pull it off?