Comcast has struck a marketing partnership with Blockbuster to offer cable subscribers discounts on DVDsbyMail.com, a Netflix-style service that offers a selection of some 100,000 movies and TV shows.
"The point of our relationship with Blockbuster is to give our customers a complementary option to the on-demand and online video content available to them," Comcast vice president of corporate communications Jennifer Khoury Newcomb said.
In addition, Comcast is testing a "store-within-a-store" program to market triple-play packages in 13 Blockbuster stores in Portland, Ore. That trial began in June and the cable operator is looking to expand into other markets in the future.
Launched last week, DVDsbyMail.com for Comcast customers is priced at $7.99 per month for one DVD out at a time (versus $8.99 regularly for the Blockbuster by Mail service); $13.99 per month for two DVDs at a time (regularly $16.99); and $16.99 per month for three DVDs at a time (regularly $19.99). Customers must establish an account with Blockbuster, which for now is handling billing.
To receive the discounts, Comcast customers must have either a double- or triple-play bundle in order to receive the discount. Blu-ray Disc rentals are included for no extra charge.
Comcast could have opted to receive a revenue share from Blockbuster but instead chose to offer the discounts to customers, Khoury Newcomb said.
Unlike Netflix's service, DVDsbyMail.com allows customers to return or exchange DVDs at Blockbuster stores. According to Comcast, 70% of its customers live within 10 miles of a Blockbuster retail outlet, with about 1,500 stores overall in the MSO's nationwide footprint.
Currently, the DVDsbyMail.com database of movies and TV shows is integrated with online content available to Comcast subscribers so that search results link to video available on Fancast.com. Eventually DVDsbyMail also will include Comcast's VOD content in search results, and the cable operator expects to integrate Blockbuster's DVD catalog with Fancast and other sites.
Blockbuster has been struggling in the face of intense competition from Netflix and other services. In 2009, the movie-rental chain closed 374 company-owned stores in the U.S. and has said it expects to close between 500 and 545 this year. As of April 3, 2010, Blockbuster had 6,136 stores worlwide (versus 7,267 a year earlier), of which 4,914 were company-owned.
The launch of DVDsbyMail.com was reported Saturday by HackingNetflix.com.