Just as it appeared that Blockbuster would be liquidated Dish Network bought it for $320.6 million in a process overseen by a federal bankruptcy court, according to The Wall Street Journal.
The most extraordinary part of the buyout is not that Dish topped the offer of perennial Blockbuster investor Carl Icahn, but that the satellite TV company will continue to operate the video rental business as a largely intact company. It is hard understand how Dish could have made this decision.
Dish apparently thinks it can sell subscriptions to its satellite TV business from the counters at Blockbuster stores. Dish also sees “synergy” between the Blockbuster VOD over IP service and its own.
The Dish decision puts it more into direct competition with premium video over the internet companies like Netflix (NASDAQ: NFLX), Apple (NASDAQ: AAPL), and Amazon.com (NASDAQ: AMZN). If so, Dish is late to a crowded party and may be ill-equipped to do well.
One of the advantages Netflix, the streaming video leader, has is its 20 million subscribers, over two-thirds of which use its online service. Netflix has also shown an appetite for the creation of original programs like those made by HBO. Netflix has also made expensive arrangements with producers to get exclusive rights to popular content. It will start to offer the series “Mad Men” soon.
Dish apparently failed to understand how difficult the Blockbuster model was to make work. Icahn’s replaced management and board could not. Even this access to talent could not repair a business which became antiquated in the blink of an eye. Dish does not have any better management to offer and its does not have a new model which has not been tried before. Blockbuster died a long time ago, and Dish will not succeed where so many others have failed.
Douglas A. McIntyre
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.