I’m not what anyone could call a financial commentator by any stretch of the imagination, but Blockbuster was a big part of how pretty much all of us saw our movies for a big chunk of our lives, so I’ve been following it’s business woes with some interest lately. Here’s the long and short of it: Their business strategy started failing, bankruptcy was filed, it was decided that they would be auctioned off as a whole rather than dissolved and sold piecemeal, and now that auction has happened. When all was said and done, the big winner of the day was Dish Network. It’s reported that they will be spending $320 million for the acquisition with around $228 million being in cash. The purchase includes more than 1700 stores that are still in existence.
When companies like Netflix and Redbox started gaining popularity and taking away Blockbuster’s market share, they eventually countered with cheap DVD kiosks, streaming services, and mailing services of their own; but it was a case of too little too late, and the company never really made the effort of going all in and putting their full weight behind the new services. Popular opinion is that Blockbuster’s new owners will try to right this wrong. David Berliner, a turnaround advisor for BDO consulting is quoted as saying, “Maybe they can do an even better job with Blockbuster online in terms of deals with streaming video.” He continued, “They have to continue to move gradually out of brick and mortar stores and get more into online and take advantage of that opportunity.”
The world of online streaming is a complex one, but it’s one in which content is king. I would imagine Blockbuster’s exclusive deals with studios for streaming rights to television and film content is a huge portion of what Dish Network is going after with this purchase. I have to wonder if their plans are limited just to bolstering Blockbuster’s already existing streaming services, or if the Blockbuster brand name will be used in any way to augment Dish Network’s On Demand services for satellite customers. Could Dish subscribers soon have a Blockbuster Rental button on their remote controls? And will Blockbuster’s content distribution deals transfer over in any way to pay per view movie services, or are they only good for subscription services on the web? I know the deals are complex and tricky, and I’ll be interested to see all of what Dish is able to do with their new company. I think one thing is clear though; the days of driving over to the neighborhood Blockbuster and browsing the shelves are one step closer to being over.