Like a good TV series preparing for a season finale, Netflix
) -- along with its leading co-stars Hulu and Amazon Prime
) -- is getting ready to kill off a supporting character. This
character (which goes by the name of Blockbuster Video) has been
around for some time, but its story grew tiresome years ago. As
consumers began to lose interest, younger stars took center
stage. After filing for bankruptcy, Dish Network (NASDAQ:
) stepped in to save the day, producing a season finale
cliffhanger that left consumers wondering what would happen
Little did they know that the coming season was about to be a
Dish had planned to turn Blockbuster into a streaming empire.
It closed stores, cut costs and transformed the video rental
chain into a modern-day Netflix-killer. Thus far, the company has
not been successful in this mission. While Dish has closed
several hundred retail locations, it has yet to turn Blockbuster
into a streaming video giant.
"You make a lot of mistakes in business," Charlie Ergen,
founder and chairman of Dish, told
. "I don't think Blockbuster is going to be a mistake, but it's
unclear if that's going to be a transformative decision."
This was an interesting response from a company that once
believed it could
take on Netflix
Dish was destined to profit from its investment from day one,
According to Bloomberg, "shuttering and selling all 1,700
Blockbuster stores that Dish purchased would make Ergen's company
about $300 million, turning Dish a profit without using the brand
As a result, Ergen told Bloomberg that there was "very little
risk" in acquiring Blockbuster. Worst-case scenario, "we break
even or make a little bit of money," he remarked.
Blockbuster employees -- which lost their jobs or will lose
them in the not too distant future -- may not agree with Ergen's
attitude. But Netflix is likely cheering right now. After 18
months of enduring the arrival of
, Netflix can finally rest easy knowing that one of them is no
longer a threat.
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