Not doing much for Dish’s bottom line
New Blockbuster owner Dish Network is confirming that it will be closing another 500 Blockbuster locations. Some will be stores with expiring leases, while others will be underperforming units that didn’t make the cut in the last round of closings. While Blockbuster currently isn’t doing much to help Dish’s bottom line, it would seem that this is just another move toward the final elimination of Blockbuster retail rental outlets.
While Dish has said that the Blockbuster name will live on, it isn’t exactly clear where that might be. It would seem that the video and game by mail service as well as the streaming offerings are where Dish will be able to leverage the Blockbuster branding. It will not be in the video rental kiosk business, as its partner NCR (that had a deal to use the Blockbuster name to brand their rental kiosks) announced that NCR was selling out to competitor, Redbox.
With the steep price that Dish paid for Blockbuster, it will have a lot of hard work ahead in order to be able to reap the real benefits of the purchase of Blockbuster. Long-term it would seem that Dish will be closing the rest of the stores as it makes its transition to primarily rental by mail order business; but the introduction of more Blockbuster-branded offers is the only way that Dish will see measurable value.
An analyst that we spoke with says that he even questions the real relevance of the Blockbuster branding over the long haul. “I am just not sure that the using the Blockbuster branding makes that much difference to consumers, as younger consumers don’t really know it and older consumers might just associate it with video rentals, which just might not translate into what the company is looking for in the long term,” the analyst told us.