Blockbuster Tests New Store Ideas in Dallas

(MoneyWatch)  More than a dozen prototype Blockbuster stores in Dallas-Fort Worth are testing ideas to turn Blockbuster locations into "entertainment destinations" instead of just places to pick up a DVD and a box of Milk Duds. According to the Dallas Morning News, the prototypes include:

• A hands-on gaming center with free wireless Internet
• A kid-friendly store with a play area and children's merchandise
• Stores that open at 6 a.m. so customers can pick up movies on the way to work
• Self-service and full-service snack bars for coffee and fountain drinks
• Stores that sell video cameras and big-screen TVs (testing a concept that Blockbuster wants to realize by acquiring Circuit City)

All of the prototypes have updated signs and paint, plus lower shelves to make the space feel more open. Some combine two or three features, and each was chosen with its neighborhood in mind: the Coca-Cola Cafe is near Southern Methodist University, while the Blockbuster with electronics is in the new-urbanist Uptown Dallas neighborhood. Blockbuster CEO Jim Keyes told the News' Maria Halkias that despite the trend toward downloadable movies and games, brick-and-mortar stores will continue to have a place in entertainment distribution:

"Think of all the investment that Sony's put into a Blu-ray product line," he said. "It's based on an assumption that discs will be around for a while. That's not just us thinking this; it's the industry that believes consumers will still prefer all forms of access." Stores are just one piece, but they're worth the attention, Mr. Keyes said.

Analyst Arvind Bhatia of Sterne Agee & Leach in Dallas likes the full-service beverage counter, which could generate an impulse purchase on top of a rental, and the gaming store but not the technology store. "I'm not sure someone will buy a $2,000 TV at Blockbuster," he told the News.