Dish Network landed the winning bid, valued at around $320 million, for Blockbuster its bankruptcy auction. The company actually expects to pay around $228 million in cash — after "certain adjustments" are made at the deal's closing — for the rental chain, according to an announcement made this morning.
But don't expect the deal to help Blockbuster's remaining 1,700 beleaguered stores. Instead, Dish is likely aiming to take advantage of Blockbuster's online video streaming service, disc-by-mail rentals and rental kiosks.
"Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," Tom Cullen, executive vice president of sales, marketing and programing for Dish Network, told Reuters.
It's unlikely that it would do so, but the smartest thing for Dish to do may be to rid itself of even more Blockbuster retail locations and focus on a wider proliferation of its kiosks, which compete directly with Redbox, and focus more on its video streaming service, which is available on multiple living room devices.
The purchase also opens the door for Dish to offer cross-promotion deals with its satellite TV and Blockbuster's services. I wouldn't be surprised if Dish ends up offering free Blockbuster streaming accounts and disc rentals to its subscribers as an added bonus. The combination of Dish and Blockbuster could attack Netflix — which doesn't offer rental kiosks or traditional TV service — from multiple sides.
It's also worth considering just how far Blockbuster has fallen. At its highest point, the company's market cap sat at more than $5 billion in 2002. Now, Dish has managed to snag it for slightly more than two times what Netflix paid to stream Mad Men.
Dish's bid still needs to be approved by federal bankruptcy court at a hearing on Thursday.
Tags: kiosks, video rentals, video streaming
Companies: Blockbuster, Dish Network
People: Tom Cullen
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Source: http://feeds.nytimes.com/click.phdo?i=218bebd6d8e0a3d42cd1cd3cd076fd5e
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I know I was happy when I heard the news of DISH Network purchasing Blockbuster! It's been a while since, but they are keeping stores open and did just cross promote with DISH Network by giving their customers the new Blockbuster Movie Pass for only an extra $10 a month. It includes DVD's and games by mail, PC and TV streaming, and 20 premium movie channels on top of your already awesome DISH programming. It's definitely something to check out! I already subscribe and work with DISH so it was a no brainer for me to sign up! Check it out at dish.com. :)
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