Blockbuster STB necessary but no game-changer

Kaufhold sees the target audience for this service as the low end of consumers who don’t already have digital TV from a cableco or telco. Otherwise, most higher end customers will already have an on-demand subscription offering from a Verizon FiOS, Comcast or other TV service provider. In-Stat has also found that these new consumers will hold off spending more than $100 on any consumer electronic device this holiday season, so the Blockbuster price point should be appealing.

The device, which won’t be rebranded for Blockbuster, can be integrated into the home entertainment system through composite cable, HDMI, component cable or Toslink. It will also provide access to feature videos, user-generated content and Web services, including music, photos and Internet radio, with options for personalization.

The MediaPoint digital media player works with any broadband connection, either wirelessly via built-in WiFi or wired via Ethernet cable. According to 2Wire, the viewing experience is DVD quality, regardless of the speed of the broadband connection. The device downloads movies to an 8-GB hard drive to be stored for 30 days or 24 hours after viewing is started. The player also supports HD video content and can be connected to HDTVs.

Combining digital terrestrial linear TV broadcasts with broadband video for VOD is already a popular strategy in Europe and is gaining traction in the US amongst satellite companies, including Dish Network and DirecTV. 2Wire was marketing the MediaPoint device for service providers wanting to stay competitive against over-the-top video, but equipment manufacturers and movie storefronts appear to be the first movers.

Jonathan Symonds, vice president of product management at 2Wire, pointed out that the world is already increasingly moving to online video, with 64% or more of Americans watching video online each week on sources like Hulu. It could be a compelling additional service for telcos, but for a company like Blockbuster with its history in physical DVD sales, the service could be table stakes.

“In places where you are doing IPTV, whether you are BT or AT&T or someone else, there is always going to be parts of your network where a product like this is a great complement to what you are doing,” Symonds said in an interview about MediaPoint. “But if you are not doing that, I think this is a very good product with a lot of strategic upside. If you market it correctly, the strategic upside and portfolio of options you have will really be gravy if this continues to play out the way it is now.”