Tesco has just taken a majority stake in local video-on-demand service BlinkBox with an 80% stake in that business.
Blinkbox is the UK’s leading movie streaming service, offering thousands of titles streamed on the internet to 2m users each month. Their catalogue of more than 9,000 titles is available to rent or buy, alongside a host of free-to-view movies, TV shows and trailers, on PC, Mac, PS3 console, tablet devices and internet-enabled connected TVs.
Tesco has bought an 80% stake in Blinkbox from Eden Ventures and Nordic Venture Partners.
Richard Brasher, Tesco UK CEO said, “Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice. We want to allow them to decide how they access entertainment content and on which devices, whether it’s on PC, TV or tablet. The acquisition of blinkbox, together with a range of other services currently in development, means we can link physical purchase of a product to the building of digital collections in a new and seamless way. Working with the blinkbox team and our content partners, we will bring these compelling propositions to life for our customers.”
So what’s the deal? As a customer, traditionally you buy a DVD and the reality is that you have really only bought the right to watch the movie on that DVD. If it gets damaged or lost, then no more viewing of that movie is available. The right to watch the movie is tied to the continued good condition of the medium and format on which it is embedded. Another example: the loss and non-replacement of my VHS machine means that I have lost the ability to play my old and substantial VHS movie collection.
Using this service Tesco can “link together” the physical purchase of films and entertainment with digital technology to create a multichannel entertainment offer. That means that when you buy a movie, you buy the right to watch it in any format and device covered by Blinkbox technology, not just on the physical DVD. In future there might be a lo-res version for your mobile phone, standard definition for an average TV, and an HD version for your high-bandwidth broadband and HD TV.
I should point out that this is a long-term aim. The team set up to run the service will need to walk before they can run – and at each step offer a really good service for customers. Nobody at Tesco is going to rush into this without geting every stage of this journey working perfectly. Deep breaths, dear reader, this journey to Utopia will take time!
The Blinkbox technology exists today on Sony PlayStation/3 consoles (I use mine far more for watching content than playing games) and also on Samsung’s Internet@TV service which is available as soon as you plug in an ethernet cable or wifi dongle into the back of the TV.
I’ve been a ‘technical consult’ on this project working with the business development team, which looked into the possibility of on-demand media for customers last year as a way of augmenting DVD sales. That’s the real reason I ended up at CES Las Vegas last year. My role was to see how we could make this work technically from end-to-end. Buying into Blinkbox with their massive media library of more than 9,000 movies and proven delivery technology makes this somewhat easier.
So in future you buy the right to watch the movie, and no longer get tied to the format or medium on which that movie gets to your screen. Exciting stuff!
Further reading: Tesco Press release: http://www.tescoplc.com/plc/media/pr/pr2011/2011-04-20/
Media coverage examples: http://www.marketingweek.co.uk/sectors/retail/tesco-buys-into-blinkbox/3025698.article