Wednesday, April 6, 2011

Dish Satellite Acquires Blockbuster

Blockbuster Video, once the darling of the rental DVD business has gone bankrupt and now sold to Dish Network. The question is why. Where is the synergy between a satellite company and a brick and mortar retail chain. And does Dish have the magic to reinvent Blockbuster to compete again.

Blockbuster's management missed the boat when accessing its competition; Netflix brought an online and mail alternative while Redbox delivered a vendor strategy to bring the DVD closer to where the consumer shopped. Redbox also hurt Blockbuster with a cheaper rental alternative. Dish needs to reinvent the Blockbuster brand to get back into the game. But does a satellite company understand the retail game.

I recall a decade ago when Cablevision bought Nobody Beats The Wiz out of bankruptcy. With so much debt owed Cablevision for its media buys, owning The Wiz must have been better than writing it off. Yet their success as a satellite company could not fix the problems of The Wiz and today the brand is long gone. I fear the same will be true for Blockbuster.

A complete overhaul of Blockbuster and perhaps a name change too to reinvigorate the brand. Expand from DVDs to add game products. Compete in the used market with Game Stop and seek other entertainment software to the mix. Push further into the subscription model to compete with Netflix and others and use a low cost strategy to gain a customer base. Will it be enough? Let's just say the odds aren't in Blockbusters favor.

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