Since 2005, when Apple (s aapl) re-invented the music business by offering music downloads, much of the industry followed suit. Most attempts, if not all of them, failed. When it comes to mobile apps and digital movie downloads, history is repeating itself. But unlike music, there are no clear winners yet, though Netflix (s nflx), Amazon (s amzn) and Apple are all vying for the top spot. Today, Variety reports, electronics retail chain Best Buy (s bby) will join the pack with plans to launch its own digital download service.
Best Buy is said to be talking with companies such as CinemaNow to help run this service. My advice to them is to buy an existing player and get to the market fast — otherwise they’re likely to lose out to Netflix, which is currently the best-positioned to succeed with digital downloading. They’ve got lots of players from which to choose — Vudu and Jaman are the first to come to mind. And Best Buy does have a habit of buying distressed assets, most notably Napster, which it acquired in a move to get into the digital music download business.
Best Buy, like Blockbuster (s bbi) and other companies that have profited handsomely from the sale of DVDs, face a difficult future. Sales of the shiny discs have started to lose steam and the new Blu-ray ecosystem has been hampered by the global recession. But most importantly, consumer habits are starting to shift to consuming video online.