Blockbuster, the United States DVD-rental business which went bankrupt last year, has a new owner, after the US satellite broadcaster Dish Network won a US$321 million ($413.5 million) auction for the company.
Controlled by the Colorado billionaire Charlie Ergen, Dish Network is the third-largest satellite group in the US and its purchase of Blockbuster is an ambitious attempt to take advantage of upheavals in the world of broadcasting.
Ergen is expected to expand Blockbuster's nascent internet-streaming business, which offers online movie rentals, as well as using some of the company's 1700 high-street stores to sell satellite dishes and Dish Network services.
Internet video is emerging as a major threat to traditional cable and satellite-television companies, particularly in the US, where new businesses such as Netflix and Hulu offer television shows and movies on demand.
Dish Network shares fell in a rising stock market yesterday, however, as questions remained over how the company plans to deal with Blockbuster's traditional DVD-rental business, which has fallen deep into the red.
Several of the rival bidders in yesterday's auction planned to shut its network of stores down completely, but Ergen's vice-president of sales and programming at Dish Network, Tom Cullen, signalled Blockbuster would continue.
"With its more than 1700 store locations, a highly recognisable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," he said.
Blockbuster collapsed in September after years of difficulties brought on by the arrival of cheaper competitors, including Netflix, which began renting DVDs through the mail, and Redbox, which used kiosks instead of expensive high-street stores. New digital services, including Blockbuster On Demand, came too late to save the company.
Blockbuster creditors are expected to receive about US$178.8 million of Dish Network's US$321 million bid.
- Independent
New owner for Blockbusters
AdvertisementAdvertise with NZME.
