Dish Network Buys Blockbuster, Plots a Second Act for the Video Rental Chain
Antiquated brick-and-mortar video rental stores and bulky satellite dishes have united with the auction for bankrupt Blockbuster. On Wednesday Dish Network secured the winning bid, purchasing Blockbuster for $320 million.
But what will become of Blockbuster? First, the deal needs U.S. Bankruptcy Judge Burton Lifland's stamp of approval, according to Bloomberg, but then Dish can go ahead with its plans to reorganize the once-proud movie-rental chain, which once minted a fortune renting VHS tapes and charging late fees. Then came Netflix, on-demand movies from your cable provider, and a host of Internet-based streaming video services.
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What's Next for Blockbuster?
Dish has expressed interest in using what's left of Blockbuster's stores to sell subscriptions to its service--which sounds a little too quaint and old-fashioned to me--and "possible synergies from Blockbuster's on-demand business," the Wall Street Journal reported. Take that to mean Blockbuster's streaming content will be delivered through Dish's variety of Android, iOS, and BlackBerry apps, as well as through hardware such as DVR players and Web-connected TVs.
Other bidders--including Carl Icahn, a major Blockbuster shareholder and bondholder, and a Monarch Alternative Capital-led group of Blockbuster lenders--had considered liquidating the company.
But Tom Cullen, Dish's executive vice president of sales, marketing and programming, is optimistic. Cullen said in a statement that the Blockbuster acquisition will complement Dish's streaming content "while presenting cross-marketing and service extension opportunities."
Cross-promotional ... deal mechanics ... revenue streams ... jargon ... synergy. That must have been the best presentation ever.
When Blockbuster filed for bankruptcy in September 2010, the chain had 5600 stores, including 3300 in the United States, and assets of $1.02 billion--with a debt of $1.47 billion. As of this week, Blockbuster has 2400 U.S. stores, with plans to close another 700 sometime this month.
For a jaunt through happier times down memory lane, check out this bunch of old-school Blockbuster TV commercials on YouTube.