RedBox has been a massive hit without large stores because they put their vending machines where people already are, like the supermarket. No extra trip or hassle required. And at $1 a movie, Blockbuster doesn’t stand a chance. It’s interesting that Blockbuster has watched all this go on in the past few years but has not been able to do much of anything about it. They’ve experimented with a few things, but halfheartedly and they have been failures. Someone at corporate didn’t want to hurt the mainline retail business, which was really bad strategy because that business is dead now anyway and they have nothing to show for it.

Blockbuster has misread and misunderstood most every new business reality of the digital age. There CEO talks a good game but somehow I doubt they will have the boldness and smarts to actually do what it takes to catch up. The only thing they have going for themselves is a still strong brand name. If they can just find the guts to capitalize on it.

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Cheap Trick is a band that had it’s heyday back in the late 70′s and 80′s, but it has found a way to stay relavant in todays world despite monumental changes in the music business. While other older bands have been very slow to adopt the new digital marketplaces like iTunes, Cheap Trick has gone all in on new media marketing.

In this CNBC video, the band talks about how they dropped their record label and are doing all marketing and distribution themselves these days. They clearly recognize most of their money is made from touring and merchandise, not record sales. “Why do you give some of your music away?” asks the reporter with surprise. “It’s great promotion!” answers Cheap Trick.

An older band like Cheap Trick has virtually no chance for traditional radio play or prime locations at retail. The band knows their best chance to keep doing what they love and keep getting paid is to take full control over their own situation. They have also been very savvy in creating work for movies, video games and even Stephen Colbert’s theme music. Not only do they know how to market to their core audience, but embracing these new venues can open them up to new customers as well.

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Books Referenced:

Born Digital
Grown Up Digital

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In general I don’t trust Blockbuster to pull of either the hardware or the service. It’s not what they do and unless they have a very good partner to help them, I foresee failure. If they can put more pressure on Apple, however,  to get more movies on iTunes or Netflix to accelerate their online initiative, their effort will be worthwhile for end users.

It’s funny to read statements in the article like Blockbuster needs to be careful not to canabolize their brick and morter business. That’s old school thinking. That business is already dead. The best way to survive in a changing world is to put yourself out of business before someone else does. Blockbuster does have a strong brand name and a window of opportunity here to make the leap. Are they savy enough to pull it off?

Well, if I didn’t have to wait for the mail to get a movie. If I could sit in the comfort of my couch and order up movies instantly. Enter Apple TV. Especially with the new Take 2 version of Apple TV where rentals are part of the equation, the speed an simplicity of watching movies on demand is unparalleled.

Netflix and Apple have equal but opposite problems. Apple  has a fantastic distribution system but not nearly enough movies. Netflix has all the movies and then some, but an outdated and slower delivery method. I’m waiting for one or the other to deliver the knockout punch. If Netflix could only deliver online more effectively. Their current system for watching movies online is cumbersome, only works with Windows and is available for very few movies. So, it’s useless. Apple has very few movies available and at the rate they add movies, it will take a lifetime to match the Netflix selection. Also, Apple has some of the more draconian and lame DRM rules for rented movies. Lastly, at $3.99 per movie, it only takes 3 iTunes movie rentals to equal a basic Netflix subscription which gets you unlimited movies per month and no stupid DRM rules.

Now Apple is the 10,000lb gorilla in this match and should be able to knock out Netflix easily, but so long as Apple and Hollywood keep their heads in the ground, they’re never going to do it. I actually blame Hollywood on this one as they are mostly short sided and paranoid. I think Apple does want to knock out Netflix but Hollywood won’t let them. Hollywood execs are more scared of Steve Jobs than they are of the so-called movie pirates. Fear is never a winning business strategy.

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