Blockbuster (NYSE: BBI) must want to own a piece of everything. First, it made a bid for Circuit City (NYSE: CC) and now it is trying to get a piece of the new pay TV channel being launched by Viacom (NYSE: VIA).
Viacom says it will start a TV network with movies and other video content with contributions from MGM and Lions Gate (NYSE: LGF). The channel will compete with HBO and Showtime.
According to The Wall Street Journal, "As part of a deal being discussed, Blockbuster would get digital rights to the new channel's programming in return for an investment in the partnership."
How that makes sense is a mystery. The Viacom channel can sell DVDs though a number of outlets. Streaming content over the internet does not require help from Blockbuster. How does a company with rental stores and a DVD-by-Internet operation help a pay TV channel which will be distributed by satellite and cable?
Blockbuster has problems of its own. For starters, it just needs to stay in business. Its stock trades at $2.98, near a 52-week low, and down from more than $20 less than five years ago. Putting capital into new ventures or nutty M&A transactions is a waste of shareholder money.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 Letter.
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Reader Comments (Page 1 of 1)
4-29-2008 @ 12:04PM
Jeff said...
what Blockbuster realizes is that it cant win the domain of retail rental stores. It makes sense that they would consider alternative options. the question is not how they can help with internet streaming, they just hire someone. If they aren't putting money into new ventures, they are as good as dead.