By acquiring Blockbuster, Dish would presumably get Blockbuster's streaming rights for the libraries of all the major studios, as well as the Blockbuster brand and customer list. Combined with Dish's wireless spectrum that it has acquired and technology from EchoStar, Kaufman Bros. analyst Todd Mitchell noted that it could feasibly launch a video service.
Still, neither Dish or Blockbuster has had much luck in the past with online expansion. "It's hard for us to believe Dish would be poised to successfully transform Blockbuster from a money-losing bricks-and-mortar movie rental retailer to a scaled subscription online streaming service," Mitchelson wrote.
Blockbuster's relationship with TiVo is also worth noting, and could have some value to Dish, Mitchelson said.
The purchase of Blockbuster seems to be part of Dish's strategy to reposition the company as a two-way hybrid satellite-wireless network with a content offering that combines its current subscription-based satellite broadcast services with a host of wireless on-demand and over-the-top services, Mitchell wrote in a note."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," he wrote in a note. While the acquisition will most likely be dilutive to Dish, given its difficulty at adding subscribers, Eagan says it could provide the company with a strategic lift. Of course, Dish's intentions will be revealed in the coming weeks, but the news is hopeful for those looking to see Blockbuster, in at least some entity, stay alive. --Written by Jeanine Poggi in New York.
>To contact the writer of this article, click here: Jeanine Poggi.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV