America Online and Blockbuster Get Cozier

Welcome to Mating Dance of the Giants, brought to you by America Online and Blockbuster Video. The world's largest Internet service provider (soon to be AOL Time Warner) and the world's largest video sales-and-rental chain are expanding the symbiotic relationship begun a few months ago. The two behemoths announced February 17 that their multi-year alliance will grow in several directions, all of them intended to cement their already unshakable grip on the marketplace.

The new plan expands on an alliance announced late last year, making Blockbuster the premier home video provider on AOL's Entertainment Channel. Blockbuster began promoting AOL through its stores, giving away AOL CD-ROMS and offering incentives to new subscribers.

Now, new AOL subscribers will be able to register instantly at Blockbuster. AOL, in turn, will promote Blockbuster with an "added-value movie/game rental package uniquely available to AOL members," according to a joint press release. "The Blockbuster/AOL Program will have special offers on rentals and special services like personalized movie recommendations, pre-notification and online reservations of new videos as well as movie-related merchandise," and "movie reviews and trailer downloads," the announcement proclaims. The plan will be promoted to AOL's 21 million subscribers and to Blockbuster's 42 million active US members.

"This expanded alliance between the global leader in interactive services and the world's leading renter of videos and video games provides a great opportunity to introduce new users to all the benefits of the Internet and enrich AOL members' experience when they visit their local Blockbuster," said AOL president Bob Pittman. Blockbuster has a store within a 10-minute drive of approximately 70% of the US population, and pulls in about three million customers per day nationwide.

The deal will enable AOL "to physically reach millions of customers a day," said Blockbuster CEO John Antioco. "Both companies are able to create new services and value offerings for our respective memberships while laying the foundation for the possibility of joint promotion of exciting home entertainment technologies in the future."