Blockbuster was once the biggest name in video rentals, but it has been unable to keep up with changes in the market created by companies such as Netflix (NFLX) and Redbox.
At its peak back in 2001, Blockbuster was a major force in the video market, with a market cap of around $5 billion, but business has been slowly dwindling for the company which will have just 1,700 retail stores open by mid-April. In 2004 the company had around 9,100 retail stores in operation.
DISH is probably unlikely to close down all of the remaining Blockbuster retail stores, but it is certainly not the segment of the business that interests the company and encouraged DISH to buy it out. DISH is more interested in Blockbuster's streaming video and its Kiosk's that are in direct competition with Netflix and Redbox.
DISH Network, which has its hand full in competing with DIRECTV (DTV) will most likely use the Blockbuster acquisition to off cross-promotion deals with its satellite services.
The deal is expected to close during the second quarter.