updated 09:15 am EDT, Fri April 17, 2009
Best Buy Movie Store Rumor
If accurate, a rumor floated today will see Best Buy leap into its own online movie store. Entertainment magazine Variety claims to have heard from movie studio executives that the retailer is talking to CinemaNow and "other online movie services" to establish a link between itself and one of these services. While what's involved is uncertain, Best Buy is likely to arrange for a cut of the revenues for each movie viewed and may promote hardware with that movie service's features built-in.
The store chain has already published a listing for a Digital Movies Product Manager that indirectly supports the claim, though it doesn't reveal Best Buy's specific intentions.
The deal is reportedly spurred on by Best Buy's fears over its DVD business, which is declining as more users turn to online video services such as iTunes and Netflix. Striking an agreement would let Best Buy grow its essential electronics sales while allowing it to more gradually draw down physical movie sales without too significant an impact.
Whether or not the approach will be successful is uncertain. Blockbuster has a similar deal with CinemaNow to put Blockbuster services on TiVo DVRs and other devices, but the relatively poor adoption of CinemaNow and excessive dependence on physical stores have led Blockbuster to near bankruptcy. Best Buy is less vulnerable but has rarely had success with online services, having given up on its internal music store in favor of buying Napster.