Best Buy (NYSE: BBY) may be the world's largest electronics retailer, but it realizes that it faces a huge threat to a hefty chunk of its business. Apple (NASDAQ: AAPL) is moving plenty of movies and other soon-to-be former DVD fare through iTunes, staking a claim on a business that once belonged to Best Buy. The big box store is getting ready to fight back (finally?).
Using technology it's licensing from Sonic Solutions (NASDAQ: SNIC), Best Buy is opening an online store for movies and television shows. Best Buy CEO Brian Dunn says this move will expand the company's presence in services and will bolster company loyalty. That's the press release version, of course. The reality is that Best Buy needed to do something to protect this portion of its revenue and probably should have made the move several years ago.
Taking a page from the Amazon (NASDAQ: AMZN) playbook, Best Buy's solution will be cloud-based, obviating the need for local storage by consumers. Rather than manage physical – or even digital – media, the user can pull down the desired (purchased) movie or show and watch it anywhere.
For Best Buy, the partnership creates a strong and immediate presence in the space, which it desperately needs. In addition to competing with Apple, it also has to contend with products from Netflix (NASDAQ: NFLX) and Blockbuster (NYSE: BBI). DVD sales are dropping, so everyone needs to find an alternative, implement it and make money on it . . . fast.
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Reader Comments (Page 1 of 1)
11-04-2009 @ 8:57AM
Beltway Greg said...
Amazon is way over priced. Ridiculous P/E. Short at will anytime the futures indicate a down day buy don't leave the short on overnight because there's always a sucker on the sidelines willing to push it higher.
And Apple should pull its products from Best Buy. I was in the Best Buy here in DC last weekend and where was the biggest concentration of people? Around the Apple display.
Most of the store was empty.