Monday, April 11, 2011

Have you ever bought videos at an auction?

I've never bought anything at an auction, unless you count eBay, and I haven't even done that a lot. There are all sorts of auctions, ranging from household effects to cows to police cars to portions of the radio frequency spectrum.

But MediaMemo links to a Wall Street Journal article (some of which is unavailable) that tells how Dish Network bought Blockbuster Video, which was offered in a bankruptcy auction. Dish paid $320.6 million for Blockbuster. According to MediaMemo, Dish

plans to use Blockbuster’s 1,700 locations to help market its satellite TV service.

But what will Dish do with the current business? I'm familiar with a Blockbuster in northwest Ontario, California that is already in the process of closing, and who knows what the video rental industry will look like a few years from now.

Alan Reiter of Internet Evolution doesn't think that Dish has gained a lot by this deal. Citing the fact that Redbox and Netflix have entered markets that Blockbuster hasn't, Reiter says that Blockbuster has been "late to the party." Reiter does see some positives in the deal:

Dish could leverage Blockbuster's presence by promoting its own pay TV packages at the stores. Also, it will have Blockbuster's customer databases, which could be extremely valuable for marketing its satellite TV services. In addition, Dish could integrate Blockbuster's existing on-demand video streaming with its own offerings, possibly offering good package deals and even some free services.

But Reiter is still pessimistic. He doesn't live in Ontario, California, but his local Blockbuster has also closed...and has become an Apple Store.
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