OK the headline is a little harsh but I think it is more fun than the real headline that Tesco are rumoured to be looking to sell or close down their Blinkbox service. As usual in the interests of nothing I should confess that I know a few people over at Blinkbox and I imagine they are not having much fun reading the news in The Times that the new Tesco CEO sees the business as a distraction.
Before we ignore the possible demise of another streaming platform I think it is worth looking at the whether it ever made sense for Tesco to take on little upstarts like Spotify, iTunes, Netflix, and Amazon.
Tesco certainly was and still is a pretty dominant player in music retail. In 2013 Kantar Worldpanel reported that Tesco was the UK’s second largest music retailer behind Amazon. With the demise of HMV and other high street music brands over the last decade the supermarkets have picked up huge chunks of physical music sales and done very nicely out of it. However, nobody remembers who came second and this seems to have been somewhere in the thinking behind Tesco’s foray into digital entertainment services. They started with Blinkbox then they bought We7 and to bring these all together they created the Hudl tablet in a move that replicated Amazon’s hardware and services model.
For me there are a few reasons why Tesco may have not really been the ideal creator of an entertainment brand.
1. Everyone knows Tesco as a physical retail brand. Sure they do online groceries but when people think of Tesco they will always think of massive warehouse sized supermarkets. The main competition in entertainment streaming services are all 100% online brands and therefore consumers are way more comfortable with the idea of these virtual platforms providing them with digital stuff.
2. Do consumers really want the brand that sells them toilet paper to be the one that provides the with their entertainment? Music and films may not be priced as luxury items but on an emotional level they are just that. Entertainment is about escapism and therefore having it provided by Tesco just doesn’t tick many emotional boxes.
3. Tech is a young person’s game. OK we are all now touched by technology. We all have smartphones, tablets and stuff but when it comes to the consumption of entertainment digitally this is still very much the thing of youth, by that I mean anyone younger than me. My point is that if you are a 19 year old looking for a streaming service then do you go with Tesco’s Blinkbox or do you go with Spotify. I know as time marches on more age categories will get into streaming platforms but annual accounts are not about the money you may make in 3 years.
4. Sometimes the big idea is not realistic. Blinkbox is a big idea. Take the biggest supermarket brand in the UK and alongside its march into online retail add a nice service that provides fun stuff and not cabbage. This will of course make the brand feel more digital. Cabbage and U2 mix that well.
I admire Tesco’s attempt to expand its footprint in our lives by offering us nice, shiny, fun things but when the competition is already popular, cool and built in digital from the ground up you have to question the business plan. Of course Blinkbox was in theory a stand alone brand but I’m not sure it ever freed itself of its Tesco parents. Most people saw the brand when they were in a Tesco store, where they could not click a button and combine bananas with Gaga.
I’ll be sad if Blinkbox disappears as I think they have some really great people there who have taken on a mammoth task. Tesco is a brand that now needs to shout function rather than fun if it is to hold onto it No. 1 status. There is a reason Tesco do not sponsor One Direction tours or hold music festivals in Hyde Park, this really is a case where music and brand just doesn’t fit.