Dish Network announces acquisition of Blockbuster

    

I thought I'd start this blog with a rather mundane topic regarding the TV broadcast industry, but an opportune moment to discuss the intersection of broadcasting and the Internet presented itself in yesterday's business news. Dish Network announced the acquisition of Blockbuster, Inc. in a bankruptcy auction. This is an interesting move by a Direct Broadcast Satellite Service provider to acquire a once well known, but now utterly failed, movie rental business. Dish itself is a relatively recent incarnation, having only come into existence in 1996. In the same amount of time Blockbuster went from being the industry leader in movie rentals to becoming another casualty of the online movie rental business. Blockbuster faced significant competition from a number of players no doubt, from the erstwhile Hollywood Rentals, to complentary threats such as movie theaters and cable broadcasting in general. But make no mistake, Blockbuster was done in by the aggresive growth and market penetration of Netflix.

Executive Vice President Tom Cullen stated, "Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network." That's sufficiently vague enough to allow one to consider exactly what they might do. It's my guess that they will liquidate most, if not all, of Blockbuster's brick-and-mortar locations. Secondly, though I'm in agreement with Dish's own belief that there is significant value in Blockbuster's extensive video offerings, I don't see that this addition to Dish's portfolio will really enhance their satellite TV offerings. So though Dish was able to acquire a victim of the Internet media boom, Dish may itself be headed down that path as well. I'm in agreement with Thomas Eagen of Collins Stewart that, "Dish may lack the fulfillment infrastructure needed to distribute the titles. Put simply, this isn't enough to compete against Netflix and the Internet.