Filed under: Analysis / Opinion, iPod Family, Rumors
Cringely: Apple/Blockbuster Speculation
Since today
seems to be Speculation Day™, here's another one for you, this time a little more grounded in reality than Dvorak's column about
Apple dumping Mac OS X in favor of Windows. Robert X. Cringely, who has a much better track record at examining the
tech industry and then predicting what companies will do, has posted today a speculative and engaging article about the
potential powerhouse partnership of Apple and
Blockbuster."Apple's Blockbuster product strategy is simple. Start with a new iPod that has video- and audio-out capability. This iPod -- which will be just as good at playing songs as any iPod that preceded it - will be more than just a video storage device. It will be a video player. No make that plural - players - a whole family of video-out iPods, some with flash storage and others with little disk drives.
Take your Video-out iPod to Blockbuster, drop it in a kiosk dock then download from the local xServe your choice of 50,000 movies. You can rent the movie or buy it and you can even choose the resolution, which may or may not affect the final price. Take the iPod home, drop it in the dock attached to your TV and watch the movie. H.264 decoding takes place in the iPod in hardware.
For Apple the point here is to sell iPods to people who might not otherwise every buy one (my Mom, for example), to bring digital downloads to people who don't have broadband or even a computer, and to make it all incredibly easy. You don't even have to return the videos when you are done, since they will automatically time-out."
Such a move would truly be a win-win for both Apple and Blockbuster. Apple could supply the back-end (X-Serves, X-Sans, etc.) to run such a system. They're already signing distribution deals with the
Of course this is entirely speculation, but I think Cringely may be on to something. Apple's clearly been planning something (remember, Apple tends to plan things a least a year or two ahead of an actual release). Perhaps this is it; perhaps they're finally putting the "pod back into iPod."
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Reader Comments (Page 1 of 2)
Varun Seth said 6:16PM on 2-16-2006
This just doesn't seem to make sense to me. If people are going to embrace digital media and a video ipod, they probably have the internet and therefore apple could serve them through itunes. Why would apple get blockbuster involved? They would end up having to pay royalties they could otherwise keep...
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Hairitic said 6:16PM on 2-16-2006
Blockbuster sucks, dropped them for Netflix. A download service like this could work with the added flexibility and support of a physical store. Most with broadband would migrate to downloads to skip a visit to Blockbuster. Makes sense except for who reaps the profits from downloads? Apple or Blockbuster? Would they share?
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Scott Thompson said 6:23PM on 2-16-2006
Why? The point is to download on your own computer and go from there. Block Busters trying to hang on to a dying business.
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Damien Barrett said 6:23PM on 2-16-2006
Problem is, Haritic, is that even the broadband we have isn't really adequate for distributing movies. Very few people have the FIOS or the $500/month DSL service necessary. Even non-HD content takes time on Apple's iTunes store. A typical download of a 45-minute show from iTunes takes about 15 minutes or longer, even with a decent cable broadband. Are you saying you'd be willing to wait up to an hour for a movie to download to your entertainment center?
If Apple can move the movie distribution to Blockbuster and supply a fat pipe to ONE location, then the only waiting involved is getting the movie onto the iPod at the kiosk which is significantly faster than waiting for a download.
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narco said 6:23PM on 2-16-2006
Yeah, Blockbuster totally sucks. I tried their 2 week trial and dumped them immediately because they never had ANYTHING I wanted. I went to Netflix shortly after and haven't found a movie that they don't have yet. Well, with the exception of Meatballs 2, but it's not available on DVD!
Meat head,
narco.
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Mac Diva said 7:14PM on 2-16-2006
The model for this would be Starbucks' digital music kiosks. They haven't really taken off. The assumption that people will bring a device to a retailer only to leave with digital content on it may be problemmatical. Could be that consumers are so used to buying or renting an OBJECT when they 'go to the store' that they balk at buying something ephemeral.
I do see the problem that Cringley wants to solve. Lately, I've been wanting to get some older sci-fi tv shows and movies for my 5g iPod that I would be willing to 'rent,' but can't obtain without buying and burning DVDs. The kind of arrangement he is suggesting would work for me. But, would many people be willing to trek to the video store, buy digital content and have it evaporate soon after?
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Hairitic said 7:17PM on 2-16-2006
You make sense Damien. Unless downloads were scheduled for the night or while you were at work, it would be pretty annoying. More annoying than going to blockbuster? Maybe.
However, the teaming of Apple with Blockbuster (near completely dominant in video rentals) might work very well!!!
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brett said 7:55PM on 2-16-2006
Apple would never do this, because it could only be used for standard-def video. iPods don't have enough storage for HD video, and the connectors are far too expensive and numerous. It would need a separate set-top box. Why would they make a deal with a bricks-and-mortar retailer to provide yesterday's technology? SD video is on the way out; 10 years from now, you'll be hard-pressed to find it. Remember the "Year of HD".
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david said 8:08PM on 2-16-2006
Here's some reasons this make's tons of sense to both parties involved.
1st - Apple has a reason for millions of content 3G and 4G and Nano owners to go out and get new iPod hardware.
2nd - it opens up a whole new segment of iPod accessories.
3rd - it saves on bandwidth costs and slowdown associated with a new release. Imagine if a new hot movie gets released online. BOOM. the servers are brought to their knees and no one is happy.
4th - by leaving the movie on the iPod - it helps cut down on layman piracy. Keeping the computer out of the equation is great for content owners.
5th - Blockbuster will be able to never, ever NOT have a movie in stock, no matter how new or old. Unlimited copies. to start with, and no having to sell 90 extra copies of a movie once it's out of it's "New Release" phase.
6th - Less costs associated with stocking, inventory, management of movies not returned, etc. I'm sure employees will "rent" everything they can for free, but it'll cut down on theft.
5th - keep customers coming back to the Apple Store. If Apple sets up kiosks in their own stores, tons of in store traffic will get generated on Friday nights.
6th - other venue sales. You could put Blockbuster Pods the size of ATMs all over the place, like Airports and Subway Stations. Put in your credit card, grab a movie, get on a plane.
7th - None of this stops Apple from doing online distro. Either through a Fat Pipe or a proprietary P2P bittorrentesque thing. But it allows people who don't have a 6MBp/s connection to get moview too.
This is pure genius on bob's part - lets see if Apple is smart and ballsy enough to do it.
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Edsel said 8:13PM on 2-16-2006
Blockbuster is sucking the proverbial pond water so I don't see how an Apple alliance would help either party. Apple/iTunes is about convenience & selection. Blockbuster is about an antiquated distribution model. Perhaps there is value in Blockbuster's brand.
New video compression formats are producing incredible results and don't forget how much dark fiber we got just waiting to be lit up & supply your home with 50 MBs streaming HD content.
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U. Betchya said 8:40PM on 2-16-2006
Someone has taken the Blockbuster Superbowl commercials a little too seriously. Captive drunk audience + total BS marketing claims = "yeah... I LOVE blockbuster... they are soooo cool and the BEST video rental service on the planet..."
Sheesh.
The reality is everybody I know always thought Blockbuster SUCKED, and still thinks they do and long ago bailed for Netflix and ARE NOT LOOKING BACK.
It hardly makes sense that Apple, who so far has made some pretty good decisions regarding media packaging and selling would partner up on the sinking boat that is (and always was) Blockbuster.
Choose your favorite Blockbuster sucking tense: Blockbuster did suck, has sucked, still sucks, will suck, always sucked, sucked sooo much, sucks sooo much, etc, etc...
Don't even get me STARTED with Cringely. Complete idiot-coolaid-drinking Jack***.
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Brian Baute said 8:46PM on 2-16-2006
David's 6th point really nails it: kiosks all over the place. Blockbuster is one of the worst places for downloading digital content - there's no other reason to be there other than to get content. Imagine iTunes kiosks in Target, Best Buy, Starbucks, Outback, malls, etc. or other retail stores, restaurants, etc. Apple gets wide distribution, the locations get additional traffic ("Hey, let's stop at Target and download a movie") and a share of the revenue generated from the kiosk in their location.
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anthony said 10:12PM on 2-16-2006
Sign me up. This is a brilliant idea. David up there set up some great reasons why this would work - I love the kiosk and Airport idea. This could absolutely work! Hell you could set up a kiosk in a convienience store. I don't think there is any limitation.
As far as Blockbuster sucking - I guess some people have had worse experience than others. I couldn't say they suck but they aren't the best. I'm a VERY happy Netflix subscriber! But Blockbuster is in dire need of something to pick themselves back up. I was just telling a non-tech friend of mine how I think BB would be out of business in the next five years - but this, this could change it all.
Hmmm... Blockbuster rents video games. XBox360 connects to the iPod... Very interesting!
This concept really has EVERYTHING going for it. I'd like to see a forum deployed to discuss further ideas. Maybe if Apple hasn't thought of it we could put the thought in their heads. Nevermind - we all know Steve reads TUAW! Hi Steve!!
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justin said 12:01AM on 2-17-2006
"it saves on bandwidth costs"
How's that? I pay a monthly fee for my 5Mbps, whether or not I'd be downloading iTunes Video content (HD or otherwise). Same goes for Apple. I don't think there's a single provider in this country that has a pay-per-gigabyte model, unlike a handful of providers in Europe.
On the other hand, 5Mbps is nothing when Japan and SK have 20-30Mbps connections for not much more than we're paying on average. Boooo.
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Chris P said 12:13AM on 2-17-2006
One reason I think this could happen and would be in Apple's favor.
MAC SALES
If they put iMac's in as the kiosks then now suddenly there will be a lot more exposure the Mac. I don't know if this will make much money but if it boosts mac sales and market share then Steve will do it. This is the same thinking with the powerbook name changed to MacBook Pro. They want to saturate the world with the MAC. Everyone will know about Macs and why they should buy one for their next computer purchase. This is the iPod halo effect at it's best.
Imagine this sernario:
Average Joe gets an iPod because his friend has one. He wants to watch his favorite old movie but doesn't have a broadband connection OR doesn't want to wait forever to download.
So he drives probably less than ten minutes to Blockbuster, docks his iPod finds the movie he wants, then finds more movies he wants. While he's downloading his movie, he can buy the usuall snacks, maybe noticed a iPod accessory he likes.
Also what if the Blockbuster experience was transformed into an Apple store experience?
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Reg Muffet said 3:43AM on 2-17-2006
Dvorak gets no spam, but obviously Cringely has regular deliveries of hallucinogenic mushrooms...
Am I the only one who checked Dashboard for a date of April 1?
Apple would never want such a messy, convoluted experience, and to suggest aligning themselves with Blockbuster (a fading dinosaur to Netflix's mammal) is "grounded in reality" makes me think Damien has been at the mushrooms too...!
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shrimp said 4:03AM on 2-17-2006
I doubt it.
It may be faster to download the movie once you're at a blockbuster, but what about driving there just for a movie? I know it takes ~15 (as Damien said) to download a TV show, but I'd rather download a movie overnight than go to blockbuster, wait in line for a "ipod station", wait for it to load on the ipod, and drive back home. I mean, seriously.
This isn't even close to Apple's content delivery model. As they say "Apple makes the whole widget." I think Apple would rather burn in hell rather than rely on Blockbuster, of all companies, to deliver the token "Apple expirience". Apple likes to be in control of everything they can so they can keep the quality and design up to standards.
People these days are making either 1) obvious speculation (intel iBooks, new iPod, intel Mac minis) or 2) just plain stupid speculation (apple buying palm, partnering with blockbuster). I mean, c'mon! As Mac users we should know Apple better! They wouldn't team up with Blockbuster, that's as crazy as Guam teaming up with Canada to lauch a spaceship.
Geez.
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Rajiv Perera said 6:03AM on 2-17-2006
It is a great idea - if you can get a movie on to an iPod in around 2 minutes. Regardless of Blockbuster -- it could be a local device/kiosk, in a cofee shop, gas station, air port, dr. office, etc. - a Mac with a large drive, lets say holds the top 200 movies. A modified version of iTunes to preview and pay for the movie.
Once a day the device will sync the moview with a centralized server.
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bosco said 9:13AM on 2-17-2006
Great idea. Could imagine atm-style kiosks connected to fat data-pipes all over town. Would like to see blockbuster stores disappear forever...to many bad associations to late fees, phony-friendliness at the door, and out-of-stock titles. Could transform the blockbuster brand, though I don't really understand why apple couldn't do this themselves. Who needs all those bricks-and-mortar assets.
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Porchland said 11:01AM on 2-17-2006
Check out the two-year trend on Blockbuster's stock price and tell me this is a company Apple wants to associate its brand to.
http://finance.yahoo.com/q/bc?s=BBI&t=2y
I'm going for no.
Blockbuster is going to have to find a new business plan, buy another company to morph into, or die on the vine.
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