July 14, 2009

Blockbuster Strikes Deal With Samsung

On Tuesday, Blockbuster Inc. announced an agreement with Samsung Electronics America Inc. that will allow consumers to instantly view movies and video from its OnDemand service on Samsung's televisions and electronic devices.

This deal brings the company most known as a brick-and-mortar movie rental store, to another step into the digital age.

The service is due to launch in September or October in the U.S.  It is a similar service to Blockbuster's existing pacts with TV maker Vizio and digital video recorder maker TiVo Inc., which was announced in March.

TiVo Inc. also has deals with rival video distribution companies Netflix and Amazon.com. 

The deal with Samsung, which is the world's top maker of memory chips and flat screen TVs, will integrate Blockbuster's OnDemand service into new Samsung HD TVs, Home Theater Systems and Blu-ray players.

The Blockbuster rentals will be priced from $1.99 to $3.99 apiece for 24-hour viewing opportunity.

Financial terms of the deal have not been disclosed, nor would Blockbuster comment on expected revenues from the agreement, according to Reuters.

Senior video president of digital entertainment at Blockbuster, Kevin Lewis, said the deal has the potential to put some of the newest video titles on millions of Samsung devices.

"We believe that just as we are the leading offline rental company, we should be the leading online rental company," Lewis said in an interview.

Blockbuster still faces competition from cable and satellite providers, which also offers robust lineups of movies and shows through set-top boxes.

Other competition is through download sites such as Apple Inc.'s iTunes or file sharing sites such as The Pirate Bay.

Consumers that purchased 2009 Samsung Blu-ray players, home theater systems, LCD and Plasma TVs already can upgrade their software to access the service.  As part of the agreement, Samsung Blu-ray players are now going to be sold in Blockbuster stores.


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