Analysts skeptical of Blockbuster’s Circuit City bid; knee-jerk reaction to Apple’s iTunes, Apple TV
Monday, April 14, 2008 - 04:55 PM EST "Blockbuster Inc.'s attempt to buy Circuit City is baffling to many analysts, who think the video-rental chain needs more time to turn itself around before undertaking a costly acquisition," David B. Wilkerson reports for MarketWatch. "Another question on their minds is whether consumers will embrace the merged concept if it does become a reality.""'I think it's kind of screwy,' says Michael Pachter of Wedbush Morgan Securities. 'Because if, in fact, you wanted to go to a big-box retailer to rent movies, why wouldn't Costco have them? Why wouldn't Target? Or Wal-Mart? If it's such a great business, and you can leverage the store base, why isn't everyone doing it?,'" Wilkerson reports.
"In January, Blockbuster got a jolt when Apple Inc. announced a movie-download rental service at its iTunes store. Consumers can rent new releases for play on a computer, iPod or iPhone for $3.99 for a 30-day period, while older titles go for $2.99. All of the major Hollywood studios are backing the offering," Wilkerson reports. "The news came a year after Apple unveiled Apple TV, which enables consumers to stream iTunes content, including movies, music and podcasts, from computers to TVs."
"In rushing to do the deal now, on the heels of Apple's move into movie rentals, Blockbuster may be repeating an age-old error commonly made by Hollywood studios, according to Ralph Tribbey, editor of the DVD Release Report, a trade newsletter," Wilkerson reports. "'Hollywood always gets ahead of itself,' Tribbey said, pointing to the panic among movie executives who historically feared that television, and later videocassettes, would wipe out or substantially curtail their businesses. The DVD-rental business should remain stable for many years, he said, even as more consumers download movies straight from computers to their TVs."
Full article here.
MacDailyNews Take: Number of movies we've rented via Apple TV in the last 30 days? Nine (9). From Blockbuster or any other outfit, brick and mortar or otherwise? Zero (0).

How can anyone with a functioning brain cell think that this will benefit either business?