Does Blockbuster Have A Chance?

The New York Times recently published an article about the threat of Redbox to movie studios.  The article gives a brief summary of Redbox’s growth from 12 kiosks in 2004 to over 22,000 by year-end.  With declining DVD sales already a major problem for studios, movie vending machines throw gasoline on a hot fire by renting DVD’s at a fraction of the competitions’ cost.  Redbox is the dominant player in the growing movie vending machine business that now comprises 19% of the movie rental market.  20th Century Fox, Warner Brothers and Universal are fighting back by refusing to sell movies to Redbox for the first month following their release.

The question that I am left with among all Redbox and Netflix’s recent publicity is:  where the hell is Blockbuster?  Blockbuster’s lack of a digital media strategy has already lost them the online battle with Netflix (Dan Rayburn gave Blockbuster a virtual beat-down on the subject) and now it appears Blockbuster is going after Redbox and the DVD vending machine market???  The New York Times reports, “There are now about 500 Blockbuster Express machines, and plans call for 2,500 more by the end of the year; the company expects to open 7,000 in 2010…”  Sooooooo let me get this strait, Blockbuster wants to go into business with themselves and cannibalize their own model?  I have not done enough research to have a definitive opinion, but it certainly appears that way.