by Chris Velazco
Blockbuster (BBI.B) has definitely seen better days, but now it’s starting to seem downright desperate. According to a recent report from Bloomberg, Blockbuster is reportedly gearing up to sell mobile phones alongside the Milk Duds at its brick-and-mortar stores.
Probably the biggest surprise to be found in Bloomberg’s piece is that Blockbuster still has 850 retail locations up and running. It seems as though the ones near me have since been converted into discount book warehouses or something. Not surprising at all is that Blockbuster (and parent company Dish Network) is starting to look at cell phones as a potential savior. Despite costing consumers relatively little with a multi-year contract, carriers pay out a considerable sum to agents and retailers for every postpaid cell phone they put in people’s hands.
The move, curiously enough, isn’t without precedent. Blockbuster has apparently been peddling phones of all kinds on its website for a while now, and it stands to reason that there’s been enough traction on that front to make the prospect of selling them in brick-and-mortar stores seem like a fine idea. It’s an approach that seems to have legs, too — to say that Best Buy is in a slump is putting it mildly, but the perennial standout of its business has been its strong phone sales. Compared to a business model that (let’s face it) is quickly becoming obsolete thanks to the growth of alternate video-delivery options, selling phones suddenly seems like a valid option.
Of course, there’s one little problem with Blockbuster’s approach — perception. Really, who walks into a video store wanting to buy a cell phone? Inking a two-year deal for a smartphone doesn’t really seem like something people would do as they wait in line to pay for their Jiffy Pop. Presumably the company would try and push those devices as a key component of its Blockbuster On Demand streaming service, but I can only imagine how painful (and probably fruitless) those sales pitches could be for everyone involved.
Bloomberg’s Alex Sherman goes on to point out that the move may serve as a prelude to something bigger, courtesy of Blockbuster owner Dish Network. If you’ll recall, the satellite service provider has been making overtures at wireless carriers for a while now, and CEO Joseph Clayton hasn’t been shy when it comes to discussing his plans to create a “national wireless network.” Should Dish’s wireless ambitions pan out (a matter that’s ultimately up to the FCC), those remaining Blockbuster stores could be the frontline in Dish’s plan to attract customers, but that’s still a pretty big “if” at this point.