Report: Blockbuster in Talks to Buy Movielink1 Mar, 2007 By: Erik Gruenwedel
A Blockbuster spokesperson declined comment regarding a Wall Street Journal story that claimed Big Blue was in advanced discussions to acquire Movielink, the download service owned by a consortium of studios.
“We don't comment on news reports,” said spokesperson Randy Hargrove.
The Journal said Dallas-based Blockbuster was prepared to pay less than $50 million in cash and stock for Movielink as a conduit into the bourgeoning electronic sellthrough market.
During an analyst call Feb. 27, Blockbuster chairman and CEO John Antioco said the company was actively pursuing entry into the download business despite the prospect that doing so would produce limited financial returns in the near short term.
Antioco said he didn't believe the download market would merit more than incremental revenue until 2009.
A Movielink representative was not immediately available for comment.
“This would probably be the easiest way to get into [online delivery],” said Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles. “With Netflix's service, Blockbuster is just trying to keep up. It does seem like a cheap price, but then again [Movielink] hasn't done much.”