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Tuesday, 05 April 2011 08:49

Blockbuster’s fate to be decided soon

Written by David Stellmack
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Auction will decide the fate of the company
As we explained to you back in September, Blockbuster filed for bankruptcy; and it is likely many of you have noticed the store closing sales at a number of local Blockbuster locations. While the retail locations are being closed, the true future of the company has yet to be decided.

Currently, a number of players are in the mix to purchase the Blockbuster assets, including Dish Network Corp, SK telecom, and Monarch Alternative Capital LP, which are the bidders that we know about. There could be additional bidders, but right now it isn’t clear who those might be. The fate of the auction should be known on Monday when a bankruptcy judge will either approve or reject the largest bidder and decide if the deal can move forward.

It seems from what we have been hearing that all of the bidders that we know about have different ideas on how to proceed should they be named as the new owner of the Blockbuster. Dish Network, for example, wants to continue to build the online movie offerings if it should win the auction. No word if they would continue the retail, kiosk or mail operations, but we doubt it.

From what analysts tell us, the future of Blockbuster will likely see the end of its retail stores with Blockbuster Express Kiosks, which is basically a partnership with NCR as the future for actual physical media rental. Continued expansion of the brand into streaming content with a strategy like Netflix is very likely. It is hard to say if the new owner would want to go head to head with Netflix and also continue the mail order service. The most potential is in the use of the branding and trademarks, which will mean the focus will be on a streaming service; but analysts tell us that a new Blockbuster owner might be late to the game.


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