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Thursday, August 09, 2007

Blockbuster Takes Movielink Off Studios' Hands

Blockbuster is buying Movielink for less than $20 million, according to the Wall Street Journal. Movielink was founded by a group of movie studios in 2002, which spent as much as $150 million on the site over the next four years, according to BusinessWeek.

We could spend a while listing the problems of Movielink: limited selection, high prices, Windows-only DRM, poor marketing and promotion.

I've been bullish for a while that Blockbuster may be able to solve some of those problems.

This deal will expand Blockbuster's Total Access program, allowing customers not just to rent DVDs in stores and by mail, but download them, too. That makes Blockbuster a more formidable competitor to Netflix.

From the Forbes story:

    Blockbuster's Total Access service, which allows customers to select DVD rentals online and receive them through the mail, has about 3.6 million subscribers. Netflix has 6.7 million subscribers.

    Blockbuster added 600,000 subscribers in the second quarter, while Netflix lost 55,000 - its first quarterly decline since the service began in 1999.

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