By Mel Duvall

One of the surprising stories on the computer front in 2009 has been the runaway popularity of netbooks. Not only has their popularity caught many analysts by surprise, it has also taken a chunk out of the revenues of traditional PC makers like Dell, who failed to notice the trend early enough.

Here's another interesting development that could add to their sales momentum.

Movie rental giant Blockbuster announced an initiative Friday to begin selling netbooks in its retail outlets, with the intention of increasing its ability to digitally deliver movies and other entertainment to customers. The company said it has partnered with netbook manufacturer Archos of France, to offer a customized version of its Archos 10 netbook in stores. The netbook features an embedded link to www.blockbuster.com which will allow the company to digitally deliver entertainment via the Internet.

Joann DeLorenzo, vice-president of products for Blockbuster, said in a statement that the initiative is part of Blockbuster's strategy to be able to deliver entertainment to consumers when and where they want it. "An affordably priced netbook that allows customers to access our online rental, retail and download services, whether they're at home or on the road, is a natural fit," she said.

Blockbuster has been striving to develop its digital delivery channel in the face of competition from Internet-based services and on-demand cable company movie offerings. Earlier this year it announced an alliance with TiVo to incorporate its video downloading technology directly into TiVo digital video recorders (DVRs). Earlier this week it also announced a partnership to deliver Blockbuster entertainment directly to new Samsung HDTVs, home theater systems and Blu-ray players.

Analysts say the digital initiatives are sorely needed by Blockbuster, which has seen its annual revenues - and corresponding stock price - steadily erode in recent years. Revenues in 2008 fell to $5.3 billion, compared to more than $6 billion in 2004.

The Blockbuster-customized Archos netbook will retail for $299.99 in stores. It features a 10-inch LED screen, weighs in at 2.8 pounds, comes WiFi ready and is initially being sold with the Microsoft XP operating system. It also comes equipped with the XnView application for viewing pictures, and the vTuner application for Web TV and Radio.

In a report released earlier this week, market research firm DisplaySearch, a unit of NPD Group, predicted netbooks would grab 20% of the worldwide market in 2009. Consumers are expected to purchase almost 33 million netbooks in 2009, marking a more than 100% sales gain over 2008.

Comments (1)

	1. 08-23-2009 12:57
	Blockbuster has made big strides in their digital delivery initiatives; while targeting the netbook segment is likely a good idea, selling a co-branded netbook seems like a distraction to me, particularly if the 'value-add' is simply an embedded link to www.blockbuster.com that one could easily achieve via a browser on any netbook. It seems to me that there are more fruitful endeavors to focus on to capture netbook market share; for example, you can currently only use the IE browser to take advantage of Blockbuster's digital download service...you need to download the IE tab add-on to use Firefox. Since Firefox represents 20% of the browser market (a number far greater than those that will buy Blockbuster netbooks), they should probably try to deliver a native Firefox experience first. Registered

Fred Kauber

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