Brave New Movie Rental World

Netflix is moving to deliver rental movies over the Internet. Blockbuster is figuring that there may be some intermediate ground between online rentals and handling physical DVD discs. So the company is testing kiosks that will let you download a rental movie to a portable movie player in about 30 seconds.

The initial test only works with a portable player from Archos, but plans include a more open system that will work with more devices. As some have already pointed out, if it doesn’t work with a video iPod, it doesn’t stand a chance.

I think that Blockbuster is on the right track, but they need to tweak the design. Buying a portable device (expensive) that has to be connected to a television (complicated) in order to enjoy it in your living room is going to be beyond the average consumer who never bothered to get their VCR to stop blinking “12:00”. Instead, the system has to be as dead simple as a DVD… or even simpler if possible. I think that the answer is a removable storage media device, such as the ubiquitous USB thumb drive. These now come in sufficiently large capacities as to be practical devices to carry rental movies. They can contain operating code that could be used to manage the rental and provide some protection against unauthorized copying. And with a little cooperation from the TV makers, it could be designed to autorun when plugged into the TV; that would be even better than a DVD.

Now, the question is whether Blockbuster’s efforts will be too little too late. The company is also planning on delivering movies over the Internet; I still think that they’re idea of making a bid for Circuit City is to give them a hardware outlet for an Internet box or other new “movie” devices. It’s clear that the movie rental market is in a state of flux, and it will be a while before we find out which pricing , subscription, and delivery model will be the ultimate winner.