The Wall Street Journal is reporting that video rental giant Blockbuster is in talks to acquire video download service Movielink for a price in the neighborhood of $50 million. Two sources close to the companies confirm that discussions are taking place, but declined to confirm any price figures.
Movielink is a joint venture of MGM, Universal, Warner Bros., Paramount, and Sony, and is among the oldest of the movie download services having launched in 2002. The service has doggedly held on but has never attracted a strong following, in part because the service’s content could only be viewed on Windows PCs, or on televisions for folks running Windows Media Center Edition. In mid-2006, the company announced an option to let customers burn a DVD of their purchases via Sonic’s DVD-on-Demand technology, but that option has yet to be made available to customers—perhaps the reported approval of CSS Managed Recording will change that, even if it requires special DVD-R media.
Despite staying in business, over a year ago the studios backing Movielink considered selling the service, with reported suitors in 2005 having been Comcast, AT&T, and Blockbuster, but no deals were reached. Now, Blockbuster is apparently back, looking to spent about $50 million dollars to give itself a “triple play” of in-store, mail-order, and download video rentals. Such a combination would give it a leg up on rival Netflix—which recently entered the download business after establishing dominance of the mail-order DVD rental game, but has no retail presence. However, it’s not clear how a Blockbuster-branded Movielink would be any more compelling than the existing Movielink service which has failed to ignite consumers’ interest for the last five years.
