Blockbuster (BBI) discusses its plans to enter the VOD market in 2006 (quotes from conf call)

Below are some comments from Blockbuster (ticker: BBI) from its March 9, 2005 conference call with investors.

…We've got lots of traffic coming to our website….and we're learning how to operate in the on line space. For…the last several months, we have gone through our options. We looked at potentially purchasing a video-on-demand service… and came to the conclusion at this point that we're better off building rather than buying, based on lower cost and more compatibility with our existing site operations…we don't really think we need to buy a subscriber base for a couple of reasons. There aren't many people out there that have a particularly big or attractive subscriber base, so we think we can establish that pretty quickly…..based on how fast BLOCKBUSTER Online has ramped up in terms of the physical rentals has also given us confidence that our brand translates very strongly to an online customer….we feel more strongly now than ever that we can be in that business. It's still not a business today that makes a lot of money. It's still not real clear as to exactly the profitability, and we certainly wouldn't want anybody assuming that there's going to be any significant profitability contributed by VOD in 2006, but perhaps it will be in the future.

Quick comment: Although BBI didn't mention which companies it considered buying, a logical choice would be CinemaNow.  Blockbuster is an investor in CinemaNow.  Other investors include: Menlo Partners, Microsoft (ticker: MSFT), Lion's Gate Entertainment (ticker: LGF) and Cisco (ticker: CSCO).

(Quotes from the CCBN StreetEvents transcript.)