Despite CinemaNow, Best Buy Won’t Pooh-Pooh Vudu
Monday, May 24th, 2010
By Ross Rubin, Executive Director, Industry Analysis
As I’ve noted when discussing the e-reader market, Amazon and Barnes & Noble have an inherent advantage in garnering overall revenue given that they can call upon databases of millions of active book-buyers. When I wrote about the in-store Nook angle that Barnes & Noble was taking, I mentioned how electronics retailers could benefit from this level of integration. Last week, prior to the Google TV announcement, Best Buy announced it will offer its version of Sonic Solutions’ RoxioNow video program under its original CinemaNow brand, which Best Buy has acquired.
Best Buy has not yet rolled out enhancements to its store to promote CinemaNow and its music service Napster in-house although that is coming, according to Ryan Pirozzi, director of digital video at Best Buy. Rather, the company is now taking steps to drive connected televisions, including having connectivity products in its AV sections instead of pushing people to the computing section to purchase them. And while it is easy to get caught up in a vision of everything-everywhere Best Buy says it will start by focusing on the big-screen experience targeting TVs and Blu-ray players. It will offer a la carte buying and renting while continuing to evaluate other models.
One question that has been looming in the background has been whether Best Buy and Walmart will seek to block each other’s digital video services. Best Buy says that it will keep TV services a level playing field and not block Vudu or other competitive services. Indeed, at Google IO, Best Buy CEO offered the retailer’s support for Google TV. As I noted in an article I wrote for the Tech Illustrated publication NPD distributed at CES 2010, there are several reasons why TVs may not evolve to have open Internet access the way TVs and mobile phones do, but Best Buy’s restraint should simplify SKU management for manufacturers and service choice acquisition for consumers.
On the other hand, Best Buy will be far from a passive provider of digital content. The company is looking to link its Napster CinemaNow and Rewards programs, which could enable interesting bundling capabilities or promotions for the company’s best customers. Still, Best Buy has no illusions that the over-the-top video business will be anything but a slow march for the next few years as broadband and home networks evolve.
Tags: Amazon, Barnes and Noble, Best Buy, CinemaNow, Nook, Vudu, Walmart
Consumer Technology | Ross Rubin, Executive Director, Industry Analysis | 
May 24, 2010 2:59 pm
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