Having been a step behind in the race to pipe entertainment from the Internet to television screens, struggling video rental-chain Blockbuster Inc. is counting on a new partnership with Samsung Electronics America Inc. to regain ground on rival Netflix Inc.
In an alliance announced Tuesday, Samsung's next generation of high-definition TVs will include a built-in feature that will enable people to rent the latest DVD releases from Blockbuster with the press of a button on the remote control.
The Blockbuster rentals, expected to be priced from $1.99 to $3.99 apiece for 24-hour viewing opportunity, will be piped over high-speed Internet connections. Samsung's HDTVs will begin offering Blockbuster's on-demand service this fall.
The relationship is a coup for Dallas-based Blockbuster because Samsung is the world's largest manufacturer of flat-screen TVs. Blockbuster's on-demand rental service also will be accessible through software installed on Samsung's Blu-ray DVD players and home theater systems — devices that already offer Netflix's own Internet streaming service.
With its stores losing favor among many tech-savvy consumers who want more instant gratification, Blockbuster has been diversifying its distribution options to reverse a long-running slump that has decimated its stock price and raised doubts about its future.
Besides stores and Internet streaming, Blockbuster also rents videos through the mail — just like Netflix — and in kiosks.
The multiple channels haven't impressed Wall Street yet. Blockbuster shares closed Monday at 58 cents, leaving it with a market value of just $112 million. Netflix's market value is approaching $2.5 billion, with some investors speculating the company could be acquired by Amazon.com Inc., which also rents video over the Internet.
Netflix got the jump on Blockbuster in video streaming by introducing its technology in early 2007 as a free supplement to its DVD-by-mail service, which charges $8.99 to $16.99 per month for its most popular subscription plans. The Los Gatos-based company then made the streaming option even more attractive last year by linking it to a variety of gadgets that connect to TVs.
Blockbuster responded with its own digital alternative late last year.
Besides Samsung, both TV maker Vizio and digital video recording TiVo Inc. are teaming up with Netflix and Samsung to offer video streaming.