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Blockbuster has announced a series of exclusive DVD rental partnerships as it plans to take on streaming services like LoveFilm and Netflix.

Following a deal with several Hollywood studios including Disney, Icon and Lionsgate, new movies including Drive and Tinker, Tailor, Soldier, Spy will be available to rent in the UK from Blockbuster for three weeks prior to general release.

The DVDs can be rented online or at one of Blockbuster’s 600 high street stores, but cannot be streamed online.

Blockbluster said that it plans to start offering digital rentals at some point in 2012, but this latest deal suggests it will continue to focus on DVD rentals rather than an attack on the streaming market.

While this may shore up Blockbuster’s core business in the short term, unless it does something to make headway in the digital space soon it may not be enough to reverse its long term decline.

Online video strategist Steffan Aquarone said that Blockbuster is doing what any good retailer should do by differentiating its offering with exclusive DVDs, even if the move seems counter-intuitive in a digital age.

In truth it's the rights owners not the distributors who are backwards. They're still charging too much for most consumers and making it too fiddly to find and buy what you want via digital download or streaming. This is the reason why Pirate Bay was so successful that no-one seems to be talking about: it was more convenient, and legitimate purchase routes feel too expensive for most consumers.” 

He said that while there are still ‘ridiculous’ proposals around intellectual property law like SOPA and PIPA, the opportunity for rights owners to exploit online delivery will itself continue to stall. 

In this light it's easy to see why Blockbuster are still finding ways to differentiate box-off-the-shelf offerings.”

However the battle for online streaming and connected TV audiences has seen numerous exclusive content deals and revamped platforms announced in recent months, so Blockbuster’s exclusives may not be enough to make its DVD rental service stand-out from its competitors.

Statistics released earlier today show that 64% of consumers are willing to pay for digital film rentals, so the high street chain is missing a trick by failing to invest in streaming.

Blockbuster’s fall from market dominance mirrors that of HMV, which launched its own digital store in November.

Both brands failed to see the opportunity presented by digital downloads early enough and have now fallen far behind competitors such as Netflix, LoveFilm and Virgin who quickly established themselves as trusted rental services online.

Aquarone added that as well as having a background in rights ownership, HMV were big enough to take a bold, ambitious stance on digital delivery but seemed to fail to do so.

The perverse truth about the web is that it usually takes a brand new, tiny, often ‘illegitimate’, player to be innovative enough to make something people can see is much better than the status quo.”

Parallels can also be drawn with Kodak, which filed for bankruptcy protection last week after it intentionally refused to invest in digital camera technology for fear of cannibalising its core business of selling films.

Unless Blockbuster comes up with an online service soon it risks falling so far behind its competitors that it will be impossible to make up for lost time.

David Moth

Published 23 January, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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