Saturday, September 16, 2006

How Blockbuster could WiMaximise their distribution

I last wrote about the developing business cases for WiMax, on of the favourites in TV over WiMax.

The bandwidth and transmission distances make this technology, in many peoples eyes, a good platform for IPTV. The UK is in the stages of going digital anyway so most people will have to get used to the idea of some form of set top box, might as well be some form of WLAN modem.

The pressure that Cinema is facing, see the plea from Mark Cuban, to try and get some form of ROI in the film business is in large part down to the challenge that home entertainment lays down. The convenience factor of being in your home with your widescreen TV, DVD player and Home Theatre with full Dolby support means that the effort required to pull people out of their LazyBoys and head in to the cinema is large. As Mark mentions during a first weekend a typical distributor can end up paying $12 per head in advertising to get them to come and buy a $5 cinema ticket.

One of the leaders in the home entertainment enablement has long been Blockbuster. With operations in US, UK and Australia to name a few there are already re-engineering their business model as they come to terms with the inconvenience people feel on heading down to the shop, getting the rental and having to return it to the shop on time.

Their unlimited buffet of movies allows you to order online, build a queue of films that you would like to see and sends the media to your door. You can then return it to them in a postage paid envelope.

To me it would seem to be a simple step to adopt WiMax technology to transmit the film over wireless broadband and save the media costs.

The strength in the business model today is the knowledge that they have of the customer. They have a wish list of films, they have the customers history of not only genre of film and/or actor but spending patterns as well. This is the sort of knowledge that the telco's are going to have mine in order to transition their businesses successfully in the new emerging technologies, but more of that later.

The ability to browse, select, order and watch a film in my home over one technology is a real pull for many end users and will put Blockbuster in the same domain as cable operators.

The other benefit for them would be the softening of the impact on technology choice. They will soon face the same problem they had in the Betamax and VHS days. The different and conflicting formats of HD DVD will mean the will have to double on stock or be ready to upset some customers. Going to wireless delivery will mitigate the risk as IP is IP. There are different technologies and vendors in the WiMax loop but the packet based streamed delivery is the bit that Blockbuster have to worry about.

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