The movie-rental chain Blockbuster is expanding its horizons -- into theatrical exhibition, of all places. The corporation has announced that next month it will open its first movie theater, a multiplex, in Cholula, Mexico. The multiplex will be called Blockbuster Cinema, but Blockbuster isn't simply licensing its brand name -- the company will operate the theater under a 10-year agreement. The new 11-screen theater will be located in a shopping center that will also include a Blockbuster rental store.

This surprises me -- it seems like the traditional theatrical model is on the way out, or will need to change drastically, and many companies are trying to find alternatives. In addition, big theater chains are trying to find other events to hold in their multiplexes these days. Of course, I'm thinking of the United States -- I don't know anything about the state of theatrical film exhibition in Mexico, and perhaps theaters are flourishing there. The Hollywood Reporter article linked above does note that Mexico has one of the most saturated markets in Latin American for movie theaters. DVD rentals may not be as easy or popular in that country. Blockbuster's biggest U.S. rental competitor, Netflix, has also branched out -- but into theatrical and DVD distribution through its Red Envelope arm, to enhance the rental business. How is a multiplex in Mexico going to help Blockbuster's primary business goals?