Tesco has expanded its video streaming service Blinkbox with new music and ebook stores, as the UK-based supermarket giant looks to rival web giants such as Amazon, Google and Apple in the lucrative mobile entertainment market.
Tesco has hired Gavin Sathianathan, Facebook’s head of retail for Europe, the Middle East and Africa to lead the new ‘Blinkboxbooks’ brand.
Meanwhile. Mark Bennett, a former EMI and Warner Music executive who now heads Sainsbury’s digital entertainment unit, will head up Blinkboxmusic.
Tesco bought an 80% stake in the Blinkbox film and TV site in 2011, in what was widely interpreted as a defensive move against the likes of Amazon and Apple, whose own movie services were rapidly eating into Tesco’s share of the entertainment market.
Blinkbox customers can buy or rent new movies by downloading them over the internet, ina similar way to movie rental services like Netflix or Amazon’s Lovefilm. However, Blinkbox’s sales model allows it to offer recent box office hits, such as Skyfall, much earlier than those rivals, and even ahead of pay-TV operations like BSkyB.
The three Blinkbox retail sites will sit separately from Tesco’s main online store and will only carry subtle Tesco branding. However, the supermarket will advertise the sites heavily in store and use them to ensure that customers in search of specialist online sites for books, music, films and TV box sets continue buying from the Tesco empire instead of falling into the habit of shopping for entertainment products elsewhere. It will target the millions of customers who still haven’t started shopping online in a big way.
Michael Comish, chef executive and founder of Blinkbox, said: “Tesco is already the third largest retailer in the world, and we will have launched three new digital entertainment businesses by the end of the year, headed by some of Britain’s brightest digital minds. This is the beginning of a big journey.”
He added: “I don’t think you compete head on against Amazon. I think you compete around Amazon and leverage the strengths you have… Amazon doesn’t have 2,000 stores. Amazon doesn’t deliver to within the hour. There’s a lot which Tesco has which customers value.”
Of all the major retailers in the UK, Tesco has been the most proactive to tackle the growing threat of US-based technology companies which have managed to capture a growing market share in the UK digital entertainment market.
Tesco still doesn’t offer the ability to download games (like Amazon’s Lovefilm) and its Blinkbox service is still a separate brand. Furthermore, there’s no audiobook (such as Audible) and crucially, Tesco doesn’t offer devices under its own brand (like Google Nexus, Amazon Kindle or Apple iOS).
Meanwhile, the former director of advertising and sponsorship at Blinkbox, Scott Deutrom will be in charge of Clubcard TV, the new free ad-supported movie and TV service.
Clubcard TV will only be available over the internet, but Tesco is in discussions with satellite and cable. broadcasters about turning it into a mainstream television channel.
The supermarket will use detailed information about viewers, collected through its ClubCard scheme, to serve up carefully tailored adverts to users on an almost household by household basis.
Commenting on the marketing implications of Clubcard TV, Cornish said: “They’ll be the most targeted TV adverts in the world.”
