NEW YORK (
is slowly revealing how its acquisition of Blockbuster will fit in its satellite business. All signs continue to point toward Dish using Blockbuster to rival
subscription streaming service.
The company announced that it will provide free Blockbuster by Mail service to its new satellite subscribers through a promotion that will run into August.
"While this is a crude integration of the two companies, we would expect more innovation over time as Dish leverages its distribution technology and access to content with Blockbuster's brand and digital rights," Janney Capital Markets analyst Tony Wible wrote in a note.
Dish Network purchased Blockbuster out of bankruptcy last month for $228 million. While the company hasn't explicitly divulged what it will do with the flailing movie rental chain, one oft-repeated notion is that Dish will utilize the Blockbuster brand name to create its own subscription movie service.
By acquiring Blockbuster, Dish would presumably get the company's streaming rights for the libraries of all the major studios, as well as the Blockbuster brand and customer list. As Kaufman Bros. analyst Todd Mitchell noted following the acquisition, if combined with Dish's wireless spectrum and technology from sister firm
, the joint entity could feasibly launch a video service to compete with Netflix.
--Written by Jeanine Poggi in New York.
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