After its own set-top box bombs, Blockbuster partners with TiVo

I feel like I keep writing the same sentence over and over again: Blockbuster has a new plan to reinvigorate its business. Sadly, I feel like I’m going to keep writing that sentence until Blockbuster goes under.

Unfortunately, what the company has been trying is not working when it comes to transitioning into the digital distribution age of movies. So now it’s on to plan H, or perhaps plan I — who can keep track anymore? — a partnership with the digital video recorder maker, TiVo.

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Blockbuster will offer its on-demand movie rentals service to current TiVo customers in exchange for placement of TiVo devices in Blockbuster stores. Oddly, no money will changes hands in the deal, reports The New York Times.

Also odd is that TiVo already offers services from Blockbuster rivals Netflix and Amazon on its boxes. While the Blockbuster offering is different from Netflix because it’s a pay-per-movie (rent or buy), it’s the same as Amazon’s service on the device. And Netflix’s service, which is free to almost all Netflix subscribers, has some 12,000 titles available compared to the 5,000 – 10,000 Blockbuster will apparently have available. Blockbuster’s will be newer films, whereas Netflix offers mostly catalog films. But then again, Amazon offers the newer films as well.

So I’m not really sure where Blockbuster fits in on TiVo. It would seem that the prices are going to be the same as Amazon’s service, which TiVo subscribers are already used to using, and the content will largely be the same. And if those users want something else, they probably have Netflix. But this is just the first of many devices the Blockbuster service will be on, the company says.

Of course, it needs to say that, because its previous strategy to launch its own set-top box has failed. Yes, that was the set-top box it launched quickly after saying it was in no hurry to launch a set-top box. Instead, the company decided it needed to focus on kiosks, which has worked out well for the company Redbox, except that Blockbuster wanted to digitally transfer movies to portable players that can play movies — without supporting the most popular of those, the iPod and iPhone. And of course, users get content for those devices over the Internet already, not through some kiosk.

And here’s what else worries me: Blockbuster chief executive Jim Keyes saying things like, “Ultimately, our vision is to work with TiVo so that their subscribers can access movies not only through our On Demand service but also from our stores and through our by-mail service as well,” to The New York Times. Does Blockbuster really think it’s going to convert TiVo subscribers to frequent Blockbuster store visitors and by-mail subscribers? I don’t think it realizes the transition is happening the other way.

A story earlier this month that suggested Blockbuster was going to file for bankruptcy proved to be a bit premature, as the company instead reached deals with its lenders to extend its credit into 2010. But make no mistake, Blockbuster is in trouble. And unless one of these seemingly endless strategies pays off, it will not survive.

The company has been trying to shift the focus of its stores to consumer electronics and video games. This makes some sense, as the stores are a huge expense for the company but are going to become less and less important as consumers transition to by-mail and Internet movie distribution. But it’s still going to ultimately need to stay in the movie distribution game, otherwise it will be just be a version of Best Buy with really small stores and bad prices.

In my opinion, Blockbuster needs to think outside the box a bit to save itself. It simply won’t work to come late to a device that all your rivals are already on. Instead, it should try to cut a deal with a company like Nintendo to exclusively provide movies to the hugely popular Wii gaming console.

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Instead, I’m sure we’ll hear in the coming weeks that Blockbuster’s service is coming to the Roku box and Blu-ray players, both of which already have Netflix and Amazon services and aren’t exactly catching fire when it comes to sales.

[photo: flickr/stranglv]