Blockbuster is rolling out a gem of a new service:  Digital downloads of movies… available only in-store.  Sweet.

Between Netflix’s delivery-to-your-door model and the shrinking window between a movie’s theatrical release and its availability for cheap purchase in DVD format… Blockbuster has been taking hit after hit the last few years.  And that’s before all the digital download services cropped up at Netflix, iTunes, Amazon, & XBox Live.  Those services let you zap your favorite new movie directly to your PC with the click of a button.

So naturally Blockbuster wants to keep up, right?  So they’re launching they’re own digital download service.  Great, right?  WRONG !

The only people who will be able to use the digital download service from Blockbuster will be the people standing in their physical stores.  Because Blockbuster’s digital download service is an in-store kiosk.

Yup.  They are that stupid.

They think that you’re going to put your flash drive in your pocket, and drive down to their store, plug it in the machine, pay for a movie, wait for the download, then drive home and watch it.

From the article:

“The latest idea from Blockbuster can best be described as “Netflix meets YouTube, without the convenience.” That’s basically the pitch Blockbuster Chairman and CEO James Keyes made at his first annual shareholders meeting on Wednesday when he unveiled an in-store kiosk he hopes consumers will use to download movies.”

I would think this was hilarious if it wasn’t so insultingly backward in its conception.  Consumers will pay for convenience. That is proven.  I would rather pay twice as much through Netflix or Amazon (and get my movies to my home, from my home, on demand) than get in my car and drive to your physical store to tap my toes while your stupid kiosk downloads my movie.  And for the record, it’s pretty cheap to download a digital copy of even a new movie.  Most movie downloads on iTunes, for example, are $9.99 or so.

Blockbuster’s new service is basically the equivalent of Coke creating a new kind of vending machine… that allows you to put in your dollar… but instead of receiving in return a 20oz. bottle of Coke,  you get a coupon that says “take this coupon to the nearest grocery or convenience store to redeem for a refreshing bottle of Coke.”

It’s like the library announcing that checked out books can no longer be taken out of the building.

I can only conclude that the executives at Blockbuster are a cave-dwelling lot.  Can you think of a Fortune 500 company with less of a handle on where their industry is heading?  Because I can’t.  It’s seriously one of the stupidest ideas I’ve heard in years.

Listen, I get that they’re trying to drive traffic to and through their physical stores to try and sell more product (and pay their rent).  But seriously… you’re supposed to take what your competitors are doing and improve on it (or at least leave it the same)… not make it worse.  A roving balloon-animal magician would be a bigger draw and would probably cost less too.

The current iTunes business model is that you pay $0.99 per song.  It’s been that way for quite some time, in fact. 

But according to news reports, Apple is negotiating with record labels for a new model that would be music to the ears of iTunes fans:  free music access. 

That’s right.  Free.  Apple is trying to get the labels to consent to an iTunes where users gain access to any and all music they desire.  The catch–there’s always a catch, isn’t there?–is that Apple would then charge more for their digital music devices, and pass that extra revenue on to the record companies as payment. 

So your new iPod might cost $500 or $600, but then you’d have free music access to download all the free songs your device can hold.  Well, there’s also a rumor that Apple may include a sort of “membership” or “download subscription” fee–and I can’t tell if that’s in conjunction with the added cost to the mp3 player or as an alternative pricing model.  Either way… free music is probably on its way to iTunes soon. 

Pretty sweet, eh?  Just look at the guy in that picture; that dude is loving this news. 

Theoretically, you’d never have to pay for music again… only for mp3 players.  Granted, those mp3 players might end up costing as much as a gently used motorcycle, but hey… unlimited free music downloads, right? 

Unfortunately, if you own a Zune, you’re out of luck.  Sounds like the only folks who will be able to take advantage of this new model will be people who own or buy Apple products like the iPhone and the iPod.  Of course, if you own a Zune, you’re probably already used to being in the minority. 

The change in revenue model will be huge news if it goes through, and will further cement iTunes’ status as the top destination for digital music downloads.  Check back frequently for updates as news of this development becomes more readily available. 

These darn kids today & their newfangled music formats!

It seems that teenagers don’t buy CDs anymore.  They have moved beyond the compact disc in a big way. 

I know this because I just read this article in the LA Times, which says that in 2007, half of all U.S. teenagers bought zero CDs.  Well, almost half… it’s 48%. 

That’s sort of astounding.  I remember being a teenager–barely–and I bought a lot of tapes and CDs.  Hey, back off…I’m just old enough that my youth spanned the gap between cassette tapes and CDs. 

But regardless….I bought a lot of music. 

And I don’t think music is any less important to teenagers today than it was to kids in my day.  It’s pretty clear what’s going on:  iTunes and illegal song-swapping have killed the compact disc… or at least maimed it. 

The illegal sharing of music online continued to soar in 2007, but there was one sign of hope that legal downloading was picking up steam. In the last year, Apple Inc.’s iTunes store, which sells only digital downloads, jumped ahead of Best Buy Co. to become the No. 2 U.S. music seller, trailing Wal-Mart Stores Inc.

Please note that Wal-Mart is the number one music retailer in the U.S.  Also note that Tower Records went out of business in 2006.  Also note how sad these two facts make me.  And the article says that computers are to blame.  Here’s a snippet:

Rachel Rottman, 14, says she hasn’t bought a CD in a year. The Santa Monica High School freshman says she downloads five or six songs a day, using paid services such as iTunes and social networking site MySpace, where bands post songs for free download. Rachel said she had about 2,600 songs stored on her computer.

Before getting a computer in the seventh grade, she always bought CDs. But now it’s too much trouble, she said.

“You have to go to the store and then you have to pay — I don’t know how much, $12, I’m guessing? — then you have to put it on your computer,” Rachel said. “When you download it, it’s right there.”

Man, this girl is out of touch if she thinks CDs are only $12. 

But seriously, she’s right.  Buying a CD is, to this generation, just an unnecessary step in the process of getting your favorite songs on your iPod or uploaded to your MySpace page.  By the time people my age start becoming grandparents, the age of the physical medium for entertainment will have come to a close.  Movies, TV shows, music and more will be all digital.  These crazy teenagers today just don’t care about holding something tangible in their hands.  They care only for the music. 

In a decade or so you’ll find quaint little throwback boutiques opening up in trendy places like Nashville and Austin and they’ll sell things like CDs, DVDs, BluRay Discs, and other physical media like magazines and books.  And hippie people will shop there and remember the days when your entertainment dollars actually brought you something you could hold in your hand and touch.  And those things will cost $100 a piece, because they’ll be nostalgic items now… antiques. 

But the trend has too much momentum to be stopped now.  Digital media is the wave of the future.  You can either ride the wave, or let it overtake you… but there’s no stopping it, that’s for sure.  I can just hear the Scooby-Doo CD manufacturers howling about how they “would’ve gotten away with it too, if it weren’t for you meddling kids.”

Hey, at least music itself isn’t dead… yet.