Blockbuster offers to buy Circuit City, Apocalypse Begins

From InternetRetailer.comBlockbusterCircuit City  Video rental retailer Blockbuster Inc. has offered to buy consumer electronics chain Circuit City Stores Inc., aiming to take advantage of the convergence of digital entertainment content and devices best exemplified by Apple Inc.’s runaway success with the iPod music player and iTunes online music store.

“Marrying digital content with devices is going to happen, by us or by others in the marketplace,” Blockbuster chairman and CEO Jim Keyes told analysts today. “Apple clearly has made the most progress in this avenue.”

Keyes painted a picture of Circuit City stores selling customers, along with extended warranties and maintenance contracts, subscriptions to movies, TV shows, video games and other entertainment content from Blockbuster. “For every customer buying a TV set or other form of consumer electronics, Circuit City now can sell a subscription service to digital content from Blockbuster.com,” Keyes said. He said Blockbuster stores also could sell a limited selection of electronics devices provided by Circuit City, and that Blockbuster could place kiosks in Circuit City stores.

Okay maybe the title is a little over the top but I was caught a little off guard by this announcement. And I see many people making comparisons to the vertical integration of products and services that Apple offers (via iPods, iTunes, etc) but this seems like an Apples to Oranges (I couldn’t resist) comparison to me. Will this actually work? Will Best Buy now purchase Hollywood Video? Or Netflix? What about Wal-Mart? They won’t want to be left out of this race? Stay Tuned.

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