Dish Puts Hold on Plans to Make Blockbuster a Netflix Competitor
By Rob Scott
October 9, 2012
October 9, 2012
- Dish Network has dropped its plan to convert Blockbuster into a streaming service and use the chain’s stores to sell mobile devices, according to Dish founder and chairman Charlie Ergen. The company, which acquired the video-rental chain out of bankruptcy in April 2011 for $320 million, plans to close more underperforming Blockbuster stores.
- However, some of the stores still turn a profit renting DVDs in rural regions. About 900 stores remained open in the U.S. as of August after Dish shuttered some 500 locations.
- Ergen’s streaming plans changed when the regulatory approval process for radio wave licenses was dragged out.
- “Ergen’s airwaves, which Dish agreed last year to purchase from DBSD North America Inc. and TerreStar Networks Inc. for about $3 billion, require new handset devices with a chip that links the satellite spectrum to terrestrial towers,” reports Bloomberg. “The government’s delay has caused Ergen to change his mind about selling those products in Blockbuster stores.”
- Also not satisfied that Netflix will iron out an efficient business model with content providers, Dish no longer plans to use Blockbuster as a competing DVD-by-mail or streaming service. Dish had also considered working with Redbox, but those plans deteriorated when Verizon announced its partnership with Coinstar.
- Dish launched Blockbuster@Home for renting DVDs and games, streaming movies to PCs and accessing more than 3,000 titles via TV. The company still has plans for Blockbuster, although they have not been made clear.
- “Worst case, we’ll take our money after having wasted some time, not much money, and life goes on,” Ergen said.
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