Blockbuster (NYSE: BBI), whose stock has been on a roller-coaster ride recently, finally has something to get excited about. The company announced this morning that it would begin selling and renting movies through TiVo's DVR service, and according to the Associated Press, Blockbuster's service will have a key competitive advantage over the comparable Netflix (NSDQ: NFLX) offering. Blockbuster will offer movies two to four weeks after they hit rental stores, while Netflix has to wait until the movies are offered on pay-per-view, which occurs after the movies have been available as rentals for awhile. Blockbuster will include 10,000 movies in the service, renting them each for between $1.99 to $3.99 and selling them for between $14.99 to $19.99.
The announcement doesn't change the fact that Blockbuster is predominately a brick-and-mortar business, with a still tiny share of its revenues coming from digital. Blockbuster stock dropped to around $0.20 from over a $1 several weeks ago after bankruptcy rumors emerged then rebounded back to around a $1 after the company publicly denied the rumors and reported it would refinance some of its loans.
In addition to selling and renting movies through TiVo's DVR service, TiVo DVRs will be sold at Blockbuster stores and on blockbuster.com, and both companies will help market the new Blockbuster service on TiVo (NSDQ: TIVO). The service will be launched in the second half of this year, according to the release.
By Rory Maher