VOD Deal Block-Busted
Blockbuster-Enron marriage falls apart
By Karen Brown
from the March 19, 2001 issue of Broadband Week
Send back the presents--the video-on-demand nuptuals between Enron Corp. and Blockbuster Inc. have been called off at the altar.
After a year of aggressive PR and a quartet of field trials, the two companies abruptly announced the termination of their exclusive 20-year agreement to develop the service. Both sides are vowing to continue their VOD efforts individually.
Ongoing service trials in Seattle; Portland, Ore.; American Fork, Utah; and Manhattan will close March 31, with no decision on what to do with the video boxes used in the tests.
Enron officials are blaming the downfall on the relatively small number of movies Blockbuster was able to arrange for the service. With many of the film studios reportedly brewing their own direct VOD services, just 100 titles were provided for the first Blockbuster-Enron trials--although Blockbuster had arranged recently to add more through a deal with Universal Pictures and already has broadband distribution arrangements with Metro-Goldwyn-Mayer, Trimark Pictures and others.
"We weren't satisfied with the movies that had been obtained--we weren't satisfied that those would bring us interest from a wide enough customer base," says Enron spokeswoman Kelly Kimberly.
Kimberly says the network operator now will be looking to forge its own deals with movie studios and expand the content offerings.
"We are positive about this," Kimberly says. "We are pleased about the way the trial went, and that's why we are enthusiastic about getting it rolling more quickly. We would like to roll out this year." But, she warns, "we need good content, and that's going to be a factor in when we do roll out."
Blockbuster, meanwhile, argues the deal was not done in by content. "The bottom line is we lost confidence with Enron as a partner," says spokeswoman Karen Raskopf.
She, too, says Blockbuster is now forging ahead with its own VOD service and is in negotiations with numerous movie studios. "We really learned a lot from the trial about bringing video-on-demand to market," Raskopf says. "When video-on-demand does become a reality, whenever that is, we plan on being a force in the market."
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