Dish Network Now Owns Blockbuster

Buying a 1984 business in 2011: Brilliant!

Like buying any other group of assets, Dish gets the good stuff and can throw away the rest. It's not about "buying a 1984 business".

I wouldn't say Dish WON this auction. More like they paid for a brand name that is now pretty much worthless. If they wanted to be a Netflix broadband streaming competitor, they could have done that on their own name and spent the $320 million on content deals and on tons of advertising. I think they spent a lot of money on something worth 1/10th of what they paid for it

Blockbuster already had several content deals, which I'm guessing is what Dish, and the other bidders, wanted. I seriously doubt that Dish, or any of the other bidders, care about the Blockbuster brand. Just my guess. I don't have a dog in the fight either way.

But that Brand is the primary asset they purchased. The problem is that Brand is about as tarnished as they come. I don't know very many people that weren't burned by Blockbuster late fees and hate the company as a result. In fact a know a lot of people that even though blockbuster had better mail order DVD deals refused to deal with them for that very reason.

If Dish spent that money for the content deals I hope they are smart enough to drop the brand because it's a toxic name IMO.

Dish already has a brand, no reason to confuse what people already know. I doubt we'll see or hear Blockbuster again except in the history archives.

nice. a company that knows how to run a media based content company

The cross-marketing opportunities are worth every penny of the price.

Well thats $320 Million of dish's money they just flush down the drain

Tom Cullen says M.O.O.N. spells throw $320 million down a rat hole. Laws yes.

Nice "The Stand" reference.

LOL!!!

Ha ha!! he should have spent that $320 million on Pepto Bismol for the diarrhea Blockbuster's green apples will give him!

This may go against the “Blockbuster Fail” sentiment, but I really appreciated the company in the mid-90s. I remember when the local video store would literally have one copy of a new release, and it would take weeks to rent it. I really felt Blockbuster brought a really nice, efficient operation that improved my own personal experience from the hole-in-the-wall video store that preceded it in my town.

Having said that, that was 1993 and this is 2011, so I understand why Blockbuster is failing. It has likely been 3+ years since I rented a movie, especially since rentals are $5 or more when you can buy most movies for $10-$15 anyway.

The one recent Blockbuster service I really like was their mail DVD service (like Netflix) except you could trade in movies for free in-store rentals. We would have random things come in, not even watch them, and take them to the store for free rentals. That worked great until the local store shut down – close my Blockbuster.com account, and now I use Netflix mainly for the streaming.

How does the song go?

"Every new beginning comes from some other beginning's end".

Just as you stated, the old mom & pop joints were put out of business by places like Blockbuster, etc. Nothing wrong with it. It's just the marketplace adapting to demand.

So, along comes Netflix, and Redbox, and iTunes. Once again, the marketplace adapts to demand, and what was yesterday's success it today's end of life cycle technology.

One day, and that day WILL come, Netflix will be gobbled up by some other method of delivery. People will be posting in forums someplace like this about how Netflix is so 2011.

Out of date, and antiquated! Why get movies over your DVD player when they can beam them directly to your brain, or some shit like that.

I can remember my father joining the local video shop down the street. It was something like a $100 buy in (in 1984) and the first move he could get was "Attack of the Killer Tomatoes".

Attack of the Killer Tomatoes was so bad it was great!

Back in the 1880s, the Acme buggy whip company was awesome.... good times.

Much in the same way people have appreciated Wal-Mart coming into their area. Well, except for any small business owner that the new store crushes.

Exactly, I couldn't agree more. While I feel bad for the small video store, they just couldn't provide as good of an experience.

Wal-Mart Stores, Inc and Sam's West, Inc (both WM Companies) are just out right HORRIBLE for the public. Their one of the worst employers in the World, and the most harmful in the terms of environmentally friendly. They don't care about you, me, Grandma who works for them because they ran her former employer out of business along with every other employee. The only thing that company cares about is putting their $$$ in their pocket while screwing the public in general. WM is an EVIL company its about time more and more Cities start standing up to them and blocking them from building.

I like my local Wal-Mart, but to each their own.

Most small businesses the Wal-Mart replaced were overpriced and had tiny selections.

They just bought all the streaming rights to movies BB had. BB has a relationship with TIVO that if you guys remember Dish and Tivo are not the best of friends and there is always the list of customers that BB had on file that will be getting mail drops I'm sure for special DIsh deals.
BB also has a relationship with Verizon that might be beneficial.

Not a bad purchase for 320 million.

Others disagree:
»finance.yahoo.com/news/W ··· x=0&.v=1
»www.fool.com/investing/h ··· out.aspx
»www.marketwatch.com/stor ··· id=yhoof

I agree. Blockbuster used to have 9000 stores and probably worth more than 10 billion dollars not too long ago.

The debt that Blockbuster had was probably the most problematic issue. The huge debt load is gone with the bankruptcy. Now that they've cut down to 1700 stores at locations that are more likely to be profitable, there's probably a decent amount of value there. There's actually a lot of smaller video chains that are expanding now that we've lost so many video chains in recent years.

It's now a much leaner Blockbuster that has existing deals for online distribution. A lot of that can help with retention for their Dish Satellite business by offering cheap or free online streaming for existing customers.

I had to check to see if this was an April Fool.

How will the Dish management ever be able to explain this to shareholders? Why would the Board have approved this?

Maybe they needed a tax loss to even out their massive profits

actuilty for such a small price it makes since heck look at it this way dish network owns 1700 stores lets say each store is worth 100k in property values thats 170 million

it might make good bussnuss since in some ways

Except for the fact that Blockbuster leases all of its locations.

yeah and found out fewer stores where open overall though i think that it will be worse case about break even

Blockbuster isn't remotely dead. How many areas DONT have cable tv or DSL in the USA? Blockbuster will be happy and fine in these areas. Dish Network knows some (what %? IDK), of its customers have sat tv out of necessity.

I live in one of those areas... Only one town in the whole county has cable TV... Blockbuster just closed their store here a couple months ago.

Anywhwre that doesn't have cable people can get satellite. For those without internet this doesn't help. Nearest Blockbuster to me is over 50 miles away. Video store are going the way of the do-do

has bene expanding.... literally - not kidding and they have been steadily expanding for the last 10 years.

Blockbuster has licensing agreements and has the movies 28 days before Netflix/Redbox. It also has the local infrastructure of stores and the online streaming capability.
With a bit of smart management and marketing it can leave both Netflix and Redbox in the dust.

In my mind, Blockbuster goes on the list with places like Circuit City.

From last August..
»blog.comcast.com/2010/08 ··· hip.html

The story writes itself..

320 million well wasted!

Surely to filter its way onto your DISH bill in some way!

...is if Dish was in it for their streaming tech and contracts. If they can repurpose that into their PPV business, they might be onto something. Delivering PPV over satellite eats tons of bandwidth, so why not stream if you can? This way, they not only have access to their ViP series of receivers (if they're connected to Ethernet), but they also get access to every device that has the Blockbuster app loaded on it.

Still, $320 million is a lot to spend for that.

I was hoping someone else would have won so all the retail outlets would have been liquidated.

Blockbuster has an app for Android and iPhone, which might be something of interest, depending on what Dish Network might have planned.

Their app lets you search the titles they have available and find the nearest retail store. Plus it lets you add DVDs to your Blockbuster by Mail queue.

Oh wait.... they are closing down the retail stores and selling off their inventory.

Since their stores are closing the one attraction of getting their DVDs in the mail was that you could return to the store and get a free rental has vanished as well.

Nice tax write-off for Dish a few years down the road!
Blockbuster RIP.... you will not be missed by this guy!

You must have only looked into the crippled iTunes version. The app does much more than what you mention on Android devices. This could basically become the iTunes for Android devices with regards to movies and TV shows. It might have some potential with the right support. Although, it seems that Amazon is spinning their wheels already, as they are probably looking to enter this space and the Blockbuster app is not even available on Amazon's new Android Market, no doubt because they have conflicting plans of their own.

»market.android.com/detai ··· h_result

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Now you can download and watch the latest movies from Blockbuster® right on your Android phone with this free app! Choose from hundreds of movies, from cinema classics to the hottest new releases. Buy or rent with no monthly fees. Start watching on one Blockbuster On Demand device and finish on another!

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Next.

If they are smart enough to pull this off, this might give them a new cash cow they might need.

Develop an app that competes with Netflix, and they might have this for the win.

Charlie was always a gambler guess he took his skills to that auction.

Perhaps Dish spent all this money to prevent Blockbuster from falling into the hands of a competitor who would have a use for it.

What is not known to me is whethjer they are actually buying shares and inheriting all the debts, or whether this is a debtor in possession deal where Dish lends blockbuster 320 million to bail it out, and then Blockbuster issues 320 million worth of new shares to convert debt into equity.

In the second deal, current shareholders get no money and see their equity reduced to a very very tiny percentage of the re capitalised company. In some cases (such as GM) they don't just issue new shares that dilute the old ones to next to nothing, but fully recapitalise a new company from scratch, which voids the old shares completely.

Having all those retail outlets will benefit Dish since it will be able to sell its satellite receivers and subscriptions at all blockbuster stores.

This was a chapter 7 Liquidation. If you don't know what that means I can't help you.

The Shack used to be the major retail face for Dish. Now that they have their own B&M stores, they have less need to partner with Radio Shack.

In some ways I miss the B&M video store. With their big inventory, it was easy to find older movies that one hadn't seen in a while. Pick it up off the shefl, blow off the dust, and take it home. Most of the newer alternatives seem to focus mostly on new releases.

DISH’s winning bid was valued at approximately $320 million, but after adjustments for available cash and inventory and others, the company expects to end up paying approximately $228 million in cash to acquire Blockbuster.

»techcrunch.com/2011/04/0 ··· in-cash/

Well I give Blockbuster credit for looking out for their stores. It is commendable but not a good business move. They were also late to the game with their VOD service and late to getting them on devices so they could be played on TVs and not just on the PC. Trying to view it on a PC made it difficult for families to watch cuz no one wants to be huddled around a computer. They should have also gave VOD movie tokens to DVD by mail customers as an alternative to free movie rental e-coupons for stores. I hate that the closest store to me has gone from 10 minutes away to 45 minutes away.

On the plus side...I think it is awesome they don't charge extra for blurays. I think it was a good thing for them to rent games by mail. It just sucks that they have a delay on the new games though.

All in all I don't think that Netflix is so much better like people make it out to be. Instant streaming of video is cool but the selection isn't all that great unless you want to check out old or foreign films. On top of which there isn't a whole lot in HD. They are expanding as much as they can but I think it is slow going. I can't wait to see how bad the selection gets after Showtime pulls their content off Netflix. I also think that those watch by dates are annoying as hell. If you don't watch it by that date then it is pulled off your instant cue and doesn't tell me if or when it will be back on. What I really hate though is they charge extra for blurays. I mean come on???

I have good turn around for DVDs by mail from both. Blockbuster takes 2-3 days and Netflix takes 3-4 days. I don't stress about that so much. I just want them to get here and get back. I am just happy they don't get lost. I have only ever had any problems with Netflix disks being unreadable. I only found 3 and they quickly shipped out a new disk for me.

I have both and neither one is all that great.

Nothing like leaping headlong into the mid-80s.