MediaFile

Here’s the thing about Blockbuster: like other cultural icons, its synonymous with its service — renting movies from a local store.

Sure it does other things, rents video games, sells gadgets and point-of-sale popcorn, but most of us hear the name Blockbuster and do a quick mental check — “did I return that rental copy of “To Sleep With Anger”? (Ok, maybe that’s just me.)

But even with the spectre of looming debt, and market talk that bankruptcy might be an option it’s exploring (an idea the company flatly denied), Blockbuster is mapping out a future where Blockbuster = Movies (not so much on the “local store” part).

Its latest step on that path is a partnership that lets TiVo’s subscribers access (later this year) movies and video from Blockbuster on Demand. It joins TiVo’s roster of other video suppliers — Amazon, Jaman, YouTube, CinemaNow and Blockbuster’s archrival Netflix.

Although mentioned quietly as an aside in an Interview, Blockbuster executive Kevin Lewis also reiterated that Blockbuster is “enabling the Apple ecosystems” in its own services, which could someday mean a marriage of sorts between the video provider and the iPhone.

Get ready for Vevo, or whatever YouTube and Universal decide to call their premium online music site.

It’s no sure thing a deal will get done, of course. One source told Reuters that negotiations have “literally” just started and key details, like financial terms, are still undecided.

Still, at first glance, this seems like it could be one of those win-win deals and both sides would probably be smart to work out an arrangement.

In tough times, perhaps the maxim "beauty is in the eye of the beholder" is even more true.

In the eyes of Blockbuster CEO Jim Keyes, your local video rental joint is a kind of temple for story-loving consumers anxious to find just the cinematic gem they most desire, so they can "Go Home Happy." That's what makes it different than online video rental shop Netflix, right, Jim?

Reuters:

Given the economic concerns, and as you eye staff costs, might you perhaps automate the in-store movie checkout process? Maybe eliminate the kid behind the counter?

Sorting out what the economic downturn means for the sports world has become something of a sport itself.

Will consumers’ need to escape with some old-fashioned football trump their anxiety about shelling out hard-earned money for tickets, parking and hotdogs at the game?

Will TV broadcasters cash in on higher ratings, as consumers skip more expensive entertainment to spend time at home watching baseball or basketball on television? Or has devastation across the financial services and auto industries — two big advertisers in sports — doomed TV broadcasters regardless of audience size?

Blockbuster got into the set-top box game right in time for the holiday season with a new digital media player that brings fewer but newer titles from the Web to TV six months after arch rival Netflix launched its $99 Roku set-top box. Netflix followed that launch with similar partnerships with Tivo, Samsung, LG Electronics and Microsoft.

And that’s just the tip of the iceberg. While the number of people who watch movies or TV via the Web is still small, media and technology executives believe a host of new technologies will make Web to TV a mainstream staple. Vudu already sells a $299 set-top box that lets users download TV shows, while Microsoft’s Xbox 360 and Sony’s PS3 game consoles can also be used to download programming from the Web for TV viewing.

Apple of course is trying to take a bite of the market with its Apple TV device that lets viewers download shows from their computers onto their TVs.

Will my local movie rental shop ever become a “content hub” like Blockbuster CEO Jim Keyes hopes ? Perhaps. But his transformation of the company has certainly improved sales of one item.

Hats. Movie-themed hats. Go ahead and chuckle, but in the name of weekend family fun, I considered buying one after I saw “Indiana Jones and the Kingdom of the Crystal Skull” (I didn’t — more on that later).

Remember, Keyes is the former CEO of 7-Eleven, so he’s very familiar with merchandising. Here’s Keyes at Blockbuster’s annual meeting today in New York, talking about a marketing change the company has made and the Porkpie payoff:

Eyeing the disintegration of its brick and mortar rental business, Blockbuster offered to buy electronics retailer Circuit City for $6 a share, the rental giant revealed on Monday.

But will one plus one equal three? Putting together two struggling companies have rarely been a good idea.

The bid shouldn’t be a surprise, however. For months, Blockbuster CEO James Keyes has aimed to invest more heavily in its stores by adding more merchandise including entertainment electronics while pulling back on competing with online rental service Netflix.