May 1, 2008

Blockbuster The Latest Partner In The Viacom-Led Premium TV/VOD Joint Venture?

Remember that Viacom joint venture we told you about last week? You know, the one which will culminate in a new premium TV channel and VOD service rolled out in the fall of 2009? It looks like Blockbuster will be an additional partner in the JV, exchanging an investment in the business for digital rights to its content. "According to people familiar with the situation", Blockbuster would be an obvious addition to the partnership, which also features MGM, LionsGate, and Viacom's Paramount. Viacom previously owned Blockbuster and its top-level execs know its business well.

Blockbuster has been in the process of digitizing its business as its bricks-and-mortar rental stores have been struggling badly ever since the inception of Netflix. In fact, it's been struggling so badly that one CNET editor predicted an upcoming bankruptcy for the rental franchise. Last year Blockbuster acquired internet movie provider MovieLink in a bid to distribute a greater proportion of its rentals online and has been on a bullheaded run to secure as much exclusive content for the service as possible. Taking in a part in the new venture would bring some high-quality movie content to the service.

So far Blockbuster has been pretty tight-lipped about any involvement. A spokewoman for the company only had this to say: We are busy transforming Blockbuster into a multiplatform provider of convenient access to media entertainment. To that end, we're exploring our options so it's not surprising there are rumors out there. We've heard that line before and from those past experiences we'll predict that what the spokewoman meant to say was: Yes, Blockbuster will invest in the Viacom JV in exchange for exclusive MovieLink content.

Via WSJ