Dish, T-Mobile, Blockbuster: Merger or Martyr?

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Dish, T-Mobile, Blockbuster: Merger or Martyr?

Movie rental giant, Blockbuster LLC, has been suffering dramatic losses in revenue over the last few years. These losses are direct results of competition with on demand video services from cable providers, and online streaming services, such as Netflix and Hulu. These revenue losses hit a major low in September of 2010, when Blockbuster officially filed for bankruptcy.

Dish Network, a major satellite provider, purchased Blockbuster on April 6, 2011, for the price of $233 million, plus the accrued debt obligations, which totaled $87 million. Dish’s CEO, Joseph Clayton, announced in February of this year, that Dish would be closing some of Blockbuster’s video rental stores. He didn’t say which stores would be closing, and only referred to them as being unprofitable. This led many to believe some cutbacks were to be put in place to help the company regain its balance, after a rough few years.

In a document filed with the Texas Workforce Commission on March 7, 2012, Blockbuster announced that they would be laying off 171 employees from their McKinney, Texas distribution center. This would involve closing the distribution center and corporate office, and releasing the employees from duty. All of this was to take place on May 7 of this year.

McKinney’s corporate office, was indeed closed down, and sources say that this may not be the only corporate office that Dish has targeted. If Blockbuster is truly failing to provide revenue to Dish, will the company close the video mega-store down for good?

The days of the video rental store are, sadly for my generation, over. Netflix, Hulu, and other streaming services have put a stranglehold on video rentals involving actual store locations. American families will no longer go to the movie store and browse through titles on the shelf, but rather will order them from the comfort of their own homes. It will be sad to see such an icon as Blockbuster go down under the wheels of progress, but I suppose it is necessary to continually adapt to the changes.

Speaking of adapting to change, earlier this week, we referred to the fact that T-Mobile, or some other low end cell service provider might be in the process of forming a merger. Sources now indicate that Dish could be one of the parties involved with this merger. Dish has already alluded to the fact that they might want to enter the mobile world, and now sources are beginning to confirm that this could be a possibility. This could cause a major shake up in both the satellite television world, and the mobile world as it would offer Dish an inside line of revenue that other providers may not have. Dish has yet to confirm these rumors, though answers have been promised soon. We will keep you posted as new facts arrive.

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