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Big Retailers Expected at Movie Gallery Trademark Auction

26 Oct, 2010 By: Erik Gruenwedel

Defunct Movie Gallery and Hollywood Video may be symbols of a rapidly shrinking video store landscape, but their brands could be worth millions to myriad suitors waiting in the wings.

The U.S. Bankruptcy Court in Richmond, Va., handling Gallery’s discontinued operations, Oct. 25 granted approval for the auction/sale of the Gallery and Hollywood Video trademarks, websites and related intellectual properties.

The sale of a well-known consumer brand — despite its demise — can be lucrative to competitors and newcomers eager jumpstart their businesses with a recognizable brand.

Oregon-based Gallery shuttered operations in May following two bankruptcies.

Gabriel Fried, managing principal, with Streambank LLC, the Needham, Mass.-based company handling the auction, said interested parties include Internet sellers of DVDs, content licensing companies, download services, kiosk operators, retailers and domain-name buyers.

Streambank handled the auctions for shuttered Tower Records’ website, Tower.com, which sold for $4.2 million in 2007, and Circuit City’s intellectual assets, which generated $17 million.

Fried wouldn’t say how much he expects Gallery’s trademarks to fetch, but industry estimates suggest at least seven figures.

The strength of bids depends on the players participating. Should NCR Corp., which operates Blockbuster Express kiosks; Blockbuster corporate; Redbox or related retailers believe their business plans lend themselves to digital distribution with a well-known brand unavailable to the competition, bids could rise appreciably, according to Fried.

“Putting the Hollywood Video name on a kiosk, set-top box or cable channel seems like a smart idea,” he said. “I think it has a lot of legs as a licensing play.”

Fried said the evolution of technology dispensing disposable media via SD cards and flash drives could grow kiosk vending exponentially.

“You could put kiosks [in retail areas where] people may just be willing to do an impulse buy, but wouldn’t be willing to make a trip back to return a disc,” he said. “And Hollywood Video or Movie Gallery is a great brand for that machine.”

Third party bids are due Nov. 5, with the auction to be held Nov. 9 in New York. The court will confirm the sales Nov. 15.

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