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Comcast Seeks Safeguards From Failed Blockbuster Disc Rental Venture

11 Aug, 2011 By: Erik Gruenwedel

Cable giant wants assurances subscriber and confidential information won’t become privy to competitors such as new Blockbuster owner Dish Network

Comcast Corp. has filed a motion with the U.S. Bankruptcy Court overseeing the Chapter 11 dissolution of Blockbuster Inc. asking that proprietary business information as well as its subscribers not be subjected to unwarranted intrusion by competitors such as Dish Network, new owner of Blockbuster LLC.

Comcast and Blockbuster Inc. April 13, 2010, signed a marketing agreement that called for the creation of a joint DVD-by-mail rental service and installation of Comcast kiosks in select Blockbuster stores.

As part of that deal, Comcast and Blockbuster entered into a typical non-disclosure agreement whereby Blockbuster agreed to protect proprietary information about Comcast subscribers from potential solicitation from third party competitors.

The joint online disc rental service never materialized due in part to the fact fiscally-challenged Blockbuster filed for bankruptcy Sept. 23, 2010.

On July 29, 2011, Dish-owned Blockbuster LLC filed notice of its intention to reject the aforementioned online disc rental service. Both Blockbuster LLC and Comcast are in the midst of a “wind down agreement” to terminate the contract, according to the filing.

Comcast, which said it has no objection to the termination, filed the motion in order to “remove any uncertainty” that rejection of the disc rental service and related ventures with Blockbuster does not subject its subscribers to solicitation from third-party competitors.

“Rejection of executory contracts … does not rescind or terminate both parties obligations under that contract,” the motion read.

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