Blockbuster tries another approach in battling Netflix, with a kiosk

By Tim Conneally, BetaNews

May 29, 2008, 1:51 PM

Blockbuster and Netflix have been battling for home video supremacy for long enough to almost declare a winner, and the dual investor meetings held by the companies shows where the real disadvantage lies.

Blockbuster's more than 7,800 retail stores in the US are beginning to appear more of an onus than an asset.

However, the company remains strident in its support of physical locations with the unveiling of its Blockbuster kiosk prototype. Produced by NCR Corp, the kiosk allows for in-store downloading and will enter test markets in three weeks. The kiosks will reportedly offer compatibility with a specific Archos personal media player, but Blockbuster intends to make them compatible with a wider range of devices by the time they see a national rollout in two to three years, according to company forecasts.

NCR had a banner year in 2007, reporting record year-over-year revenue growth. A look at the company's other offerings gives a general idea of what to expect from Blockbuster's kiosks. NCR's Xpress Entertainment Kiosk, for example, is an 800 pound, 82 inch tall Windows XP machine equipped with an Intel Core2 Duo 3.0 GHz processor, with 1 GB of RAM, an 80 GB HDD, and a 13.56 MHz RFID reader. These behemoths are capable of holding 948 DVDs for sale or rent, and provide a touchscreen interface from NCR's Touch Automation.

Though Blockbuster's kiosks will serve a different purpose from NCR's Xpress Entertainment modules and therefore not be such magnificent wastes of space, one problem still remains: You will have to physically go to a Blockbuster location to download movies.

Still, Blockbuster CEO Jim Keyes has been quoted as saying these machines afford a "terrific opportunity to transform [Blockbuster's] stores."

Netflix, on the other hand, has already anticipated the remaining lifespan of hard copy media, and has already begun its transition into a video download service. The company's recent release of its first dedicated set-top box will soon be followed by new versions from major consumer electronics manufacturers.

Though it has been reported that Netflix currently streams only 10 percent of its catalog thus far, and that its investment into providing downloads will not pay off for several years, the outlook for that company is strong -- or at least, stronger. Netflix simply does not have the real estate issues that Blockbuster has, and is better suited to transition with the home video market's continued move toward pure data.