Dish buys Blockbuster in bankruptcy: Internet streaming rights key

Dish buys Blockbuster in bankruptcy: Internet streaming rights key

Summary: Dish Network won a bankruptcy auction for Blockbuster with a bid of $320 million and on the surface the deal sounds a little bit crazy. What's Dish going to do with 1,700 store locations and a brand that’s arguably broken? Think streaming movies.

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Dish Network won a bankruptcy auction for Blockbuster with a bid of $320 million and on the surface the deal sounds a little bit crazy. What's Dish going to do with 1,700 store locations and a brand that’s arguably broken?

Dig a little deeper and the Dish deal makes a little more sense. Once adjustments are made Dish will pay about $228 million in cash for Blockbuster.

In a statement, the Dish line goes like this:

With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network.

Simply put, Blockbuster is a rehab project. But the real win here may be the Internet streaming rights that Dish will now own. Dish CEO Charlie Ergan has been acquiring wireless spectrum from Echostar and Hughes. Add it up and Dish is plotting a two-way hybrid satellite and wireless network that will feature subscription broadcast TV and on-demand services.

Enter Blockbuster.

Kaufman Bros. analyst Todd Mitchell wrote in a research note:

As part of an acquisition, DISH would presumably get Blockbuster's Internet streaming rights, the Blockbuster brand and its customer lists. Combined with a build-out of the wireless spectrum it has acquired and technology from EchoStar and Hughes, we believe DISH could launch an on demand movie service that would 1) significantly enhance the competitive offering of the DISH Network, and 2) compete on a standalone basis with Netflix and other over-the-top video services.

Dish's set-top boxes already have an Ethernet port so adding streaming content wouldn't be much of a stretch.

Collins Stewart analyst Thomas Eagan also likes the Blockbuster deal, but acknowledges the uncertainties:

We find the idea of gaining access to the Blockbusters titles and streaming rights intriguing. It seems to us that there are (at least) two strategies with the Blockbuster content: 1) using the DVDs and rights to make DISH more competitive (vs. say DTV) by offering free DVD and streaming with a new DISH subscription, or 2) creating another Netflix-type provider. That said, there would be limitations to either strategy: the studio deals with Blockbuster are likely to be short-termed and may not be renewed; the streaming rights are likely shallow, in terms of number of titles; and DISH may lack the fulfillment infrastructure needed to distribute the titles.

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30 comments
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  • New business model

    They should both merge with Nokia and Microsoft to stream the HD version of <I>Titanic</I> to WP7 mobile devices via satellite.
    Robert Hahn
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @Robert Hahn I'm sure Microsoft could buy Nokia, Dish Networks, Blockbuster, and DirecTV and still have some change to spare. :-)
      statuskwo5
      • Microsft and Wireless

        @statuskwo5

        Not really, Microsoft can not buy any Company. It is PC Company. They do not know anything about Networking Technology.
        hillol
      • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

        @hillol

        <i>Not really, Microsoft can not buy any Company. It is PC Company. They do not know anything about Networking Technology</i>

        This might sound silly but tell me, have you been living under a rock? Ever heard of the Xbox or the Xbox 360? Do you use those as personal computers (PCs)?! Microsoft is owned by humans just like any other company, including BlockBuster (just in-case you didn't know ;) ), so I don't see a reason why they couldn't buy all those companies.
        MrElectrifyer
    • re:New business model

      @Robert Hahn <br><br>The three together would hasten the sinking of the <i>"Titanic"</i>
      Return_of_the_jedi
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @Robert Hahn
      Don't forget AT&T and T-mobile. Let's play how to make a monopoly without being a monopoly AKA CEO DATING GAME
      psakry
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @Robert Hahn

      Is it for LTE Network or Lower version
      hillol
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    I'm not sure that Blockbuster has streaming rights. Their streaming service is operated by Rovi. I think its just a white label deal similar to their arrangement with NCR for their kiosks operation.
    reyito2
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    Who will get Dish network now? Knowing that they will never support Netflix streaming through their set-top boxes, while most other companies will?

    Pretty big failure there, Dish. People want Netflix, not Blockbuster. Period.
    Droid101
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @Droid101 Um, if the new streaming service is better, people will want that one. Period.
      jgm2
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @Droid101 That is a huge point. Well said. Enough for me to stay away from Dish.
      dpfrz544
  • Hmm

    Add streaming (of high quality content) to my Dish subscription at a lower cost than Netflix and suddenly I can be interested.
    Azathoth
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    Wow! Dish Network and Blockbuster; the worst of both worlds.
    rcaryl
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    Is Dish really that bad? Considered it but they would charge about $50 a month after the first year of contract. They will need to offer everything Netflix does if they want to make Blockbuster profitable again. Also drop the price as well.
    Loverock Davidson
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    That was the only way Blockbuster could survive, is online streaming. <br><br>For the locations however, besides the already closing up of a lot stores, there should remain some centralzed locations for Blu-ray dvd's as there's no way I'm waiting for a 7-20GB file to download!<br><br>Especially if I want to watch a Blu-ray movie soon and want that AWESOME sound and video on my big screen!<br><br>Not to mention its sometimes fun to leave the house to get the movies, Blockbuster should have a monthly membership or something, so you can waltz in and grab a certain amount of movies per week.

    Plus have like pre-paid envelopes so you can drop off the movies at your closest mailbox.
    skyoneder
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @skyoneder "Not to mention its sometimes fun to leave the house to get the movies, Blockbuster should have a monthly membership or something, so you can waltz in and grab a certain amount of movies per week."

      They actually did have that option for many years, with both movies and video games. I know a few people that took advantage of it, but I never "consumed" enough for it to be worthwhile for me. I think it was a fairly reasonable price too (at least at a time before $8 unlimited streaming)? around $20/month.
      jmwells21
      • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

        @jmwells21 I had a monthly membership with them that was pretty good other than price. They would mail me DVDs like Netflix but I could return them at the store which was only a couple of blocks from home and they would ship the next movie on my list immediately. I also got so many free in-store rentals a month when I returned one of the mailed DVDs as well as their streaming. Once they closed the store near me Netflix became a better option at about $12/mo cheaper.
        non-biased
    • Streaming and downloads

      @skyoneder, the point of streaming is that you don't need to "wait for a 7-20GB file to download." As long as they can transmit data a little faster than the stream uses it, you'll never notice. It just gets buffered in the set-top box. After all, they have 100 minutes or so to send the entire file. You'd never sit there staring at a screen waiting that long for a download to complete, but when you're watching the movie that's exactly what you're doing. The download is happening in the background while you're watching.
      oldbaritone
  • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

    Dish also has their IPTV service for international channels. Dish network has been always consumer friendly unlike Directv, so I'm not worried. They will combine dish, sling, blockbluster, and google tv. I think the future of tv is looking exciting. I don't think you will need a dish in the future to get dishnetwork.
    kushkm
    • RE: Dish buys Blockbuster in bankruptcy: Internet streaming rights key

      @kushkm ATT uverse is whats happening. I actually have both blockbuster online and netflix.. I know crazy right...lol
      mark60639