Dish Network Buys Blockbuster For $320 million
The Dish Network has agreed to pay $320 million for virtually all the assets of the troubled video chain, which filed for Chapter 11 bankruptcy protection in September. With a winning bid at a bankruptcy auction, the Dish Network bought Blockbuster, according to an announcement made this morning. Dish will like take advantage of Blockbuster’s online streaming and movie rentals service.
“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.
Dish will probably close most of Blockbuster retail locations and focus on kiosks and on its video streaming service. The purchase also allows Dish to offer promotion deals with its satellite TV services. The acquisition will also enable Dish to go after Netflix by offering multiple services.
“Young people are downloading increasing amounts of content direct to handheld devices. The iPhone is at the forefront of a new generation of devices that are revolutionary because you don’t have to plug them into the computer to receive content,” said David Pauker, a turnaround specialist with Goldin Associates
Blockbuster’s business deteriorate quickly in the last several years partly due to competition from online rental services and kiosks such as Netflix and Redbox. And considering Blockbuster had a market cap of $5 Billion in 2002, Dish snagged it for a huge bargain. The bid still needs approval by the court.