Blockbuster Drops Plans to Take on Netflix

by Christopher Freeburn | October 5, 2012 11:21 am

Netflix (NASDAQ:NFLX[1]) has one less potential rival to deal with[2].

Plans to position Blockbuster, the one-time leading national movie rental chain, into a movie streaming platform have been scuttled, Bloomberg notes.

Blockbuster went bankrupt in 2011 and was purchased by Dish Network (NASDAQ:DISH[3]) for $320 million. Dish’s chairman, Charlie Ergen, hoped to revive Blockbuster and sell Dish equipment from Blockbuster stores that would stream movies to mobile devices.

But the government dithered on granting Dish a required waiver to use its satellite spectrum for data and voice transmission, something it would need to stream movies over the devices. Dish is still waiting for a decision.

With government approval unlikely to be granted any time soon, Dish is moving to close a number of Blockbuster locations.

The chain still runs about 900 stores. Ergen noted that in some rural areas, DVD sales and rentals can still be profitable.

Dish will still either break even or make a small profit on the acquisition even if it ultimately shutters all of them.

  1. NFLX:
  2. one less potential rival to deal with:
  3. DISH:

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