Anyone Else Remember That Blockbuster-Enron On-Demand Box?

Kristen Hayes at the Houston Chronicle writes today that there's something eerily familiar about Dallas-based Blockbuster's, um, blockbuster (?) announcement yesterday concerning its new $100 box that allows for on-demand rentals. Has to do with a turn-of-the-millennium deal between Blockbuster and Enron -- yes, that Enron -- which held hands long enough to come up with a video-on-demand console that would have brought movies into customers' homes using DSL. But the thing went busto in March 2001, Hayes writes, "with each company blaming the other for failing to hold up its end of the deal." Incidentally, according to government documents, that deal was known as Project Braveheart.

Not long after that, Enron became the most infamous word in the business dictionary. And when Kevin Howard, who was then the chief financial officer for Enron Broadband Services, went on trial in 2006 on charges of conspiracy, wire fraud and falsification of books and records, the Blockbuster deal came back to haunt him. Notes the Department of Justice's media release sent out following Howard's conviction in May 2006, Howard and others recorded $111 million in revenue from a deal that never brought in a penny: "In fact, the proof at trial established that the Blockbuster deal generated virtually no revenue for Enron and was canceled in March 2001. ... EBS's plan was to begin testing the VOD service by Dec. 15, 2000, but the service was not expected to produce any profits until many years later." Maybe because some of the boxes caught fire during testing? Doubtful that'll happen this time ... accidentally, anyhow. --Robert Wilonsky

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