Saturday, March 31, 2012

Netflix, Redbox, Blockbuster, and Amazon

My last post inspired me to switching gears to be bit crazy.

That last post was about the Kindle Fire as a perfectly viable physical and distribution platform.

But I also like the potential disruptive models, and weird (but still possible) business scenarios that get me what I want as a consumer.

I've written before about Redbox buying Vudu and Blockbuster, Netflix buying Redbox, Amazon buying Netflix, and there being an explosion of content for Amazon (though not as much as people think; Amazon really does OK, and there's a high overlap in Hulu/Redbox/Prime Instant Videos), and an Amazon Netflix rental DVD distribution (which they might or might not keep), and "Amazon Redbox" stations everywhere.

Part of this has already happened, as Netflix bought those blue rental kiosks at Walmarts everywhere. Then (in case you missed it) Coinstar (the company who owns Redbox), bought NCR for $100MM. NCR operates things like ATM machines, point of sales and retail systems, airline check-in systems, and Blockbuster Express branded kiosks

Coinstar's purchase of NCR (to be finalized quarter 3 of this year, if it's not considered anti-regulatory) includes DVD kiosks, "certain retailer contracts", and DVD inventory -- Giving Netflix a bunch of additional distribution points and product. 

That's after the Verizon and Redbox announced a physical and streaming agreement, that's going to make things real challenging for Netflix (and maybe Amazon streaming).

That Verizon / Redbox streaming competition makes things harder for Netflix, but maybe it makes them more applicable for an Amazon partnership (who obviously has the bigger market cap).

One of my big frustrations with streaming media is having to go to multiple sources to get content, and/or a lack of compelling new content (Netflix), or content expiring sooner than I can watch it (Hulu). I actually think an explosion of streaming options could be a good thing, as licensors can charge less (say, 30% of what they do for "just Netflix", license out to multiple streaming sources (4 to n), and make a lot more money, and be on whatever streaming solution to which I want to subscribe as a consumer. 

Going back to Amazon, as a consumer, I'd be fine if that scenario worked out somewhere that way (consolidated acquisition or more of the same content across multiple streaming services. Add scenarios where Amazon has an Xbox 360 media app. And buys Gamefly. That would give me my movie / book / music / gaming fixes in the same purchase / rent / stream / physical or digital model that I want, all in the same consumer-oriented ecosystem, whether I get it from my PC, phone, tablet, or game console.

Like I said, crazy. And I'm intentionally ignoring a lot of stuff. But not myopically

(Quick aside about relative market caps and aggressive partnership: Netflix is about 6x the market cap of Coinstar, but I'd argue Coinstar is being more intelligently aggressive in their partnerships and acquisitions. Netflix does stuff like the failed Quickster fiasco, and buying the DVD.com domain.)

1 comment:

James said...

You are exactly right. Having to go to different companies, kiosks, locations et. al IS frustrating. I used to get movies from Redbox, thinking it was amazingly convenient, but as media has shifted into the digital sector, streaming is the best avenue for getting the content I want. I have DISH, and love that the Blockbuster merger now gives me the opportunity to access over 100,000 titles on the Blockbuster @ Home movie package. We haven't transitioned to streaming entirely however, so it's great that I can get titles both streaming AND by mail. A coworker at DISH also told me that 20 Extra HD Movie channels come with this package, and I jumped right in line to get signed up. I've never had this many options for movies, games and TV shows, and I don't have to drive to nine different locations to get what I want!