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Press Release - DISH Network Completes Acquisition of Blockbuster Assets


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#1 OFFLINE   Jason Nipp

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Posted 26 April 2011 - 04:10 PM

DISH Network completes Acquisition of blockbuster ASSETS


ENGLEWOOD, Colo., April 26, 2011 – DISH Network Corporation (NASDAQ: DISH) is pleased to announce it has completed its acquisition of substantially all of the assets of Blockbuster, Inc.

“We are pleased to have purchased the assets of Blockbuster and look forward to building on the nationally recognized Blockbuster brand while improving the experience of delivering entertainment to consumers,” said Tom Cullen, executive vice president for DISH Network.


Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995:
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including the risks and uncertainties discussed in DISH Network Corporation's Disclosure Regarding Forward-Looking Statements included in its recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K. The forward-looking statements speak only as of the date made, and DISH Network Corporation expressly disclaims any obligation to update these forward-looking statements.

# # #

About DISH Network
DISH Network Corporation (NASDAQ: DISH), through its subsidiary DISH Network L.L.C., provides more than 14.1 million satellite TV customers, as of Dec. 31, 2010, with the highest quality programming and technology with the most choices at the best value, including HD Free for Life. Subscribers enjoy industry-leading customer satisfaction, the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 200 company. Visit www.dish.com.

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#2 OFFLINE   The Merg

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Posted 27 April 2011 - 07:36 AM

Is it just me or was that acquisition pretty darn quick?

With cutting back to a third of the B&M stores and using them as a storefront for Dish sales, it will be interesting to see how much this will add to the bottom line for Dish. While I don't think DirecTV would ever take the approach of creating a DirecTV store, I do think that Dish Network is taking advantage of a good opportunity to market their brand.

Just the fact that you could feasibly bring in a defective receiver for a quick replacement is a huge plus there.

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#3 OFFLINE   Shades228

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Posted 27 April 2011 - 11:40 AM

I'd be surprised if they turn them into customer service centers for Dish. I could see new customer sales at the most. It wouldn't be wise unless they are going to spend more $$ redoing stores so that there can be a private area.

I think this has more to do with them getting some leverage with studios and the sling/VOD aspect more than Dish customer service.

#4 OFFLINE   Paul Secic

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Posted 27 April 2011 - 11:59 AM

I'd be surprised if they turn them into customer service centers for Dish. I could see new customer sales at the most. It wouldn't be wise unless they are going to spend more $$ redoing stores so that there can be a private area.

I think this has more to do with them getting some leverage with studios and the sling/VOD aspect more than Dish customer service.


I think they'll all of the stores. What would they do with thousands of buildings? This is all about VOD.

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#5 OFFLINE   The Merg

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Posted 27 April 2011 - 02:03 PM

I think they'll all of the stores. What would they do with thousands of buildings? This is all about VOD.


I assume you meant to say "close all of the stores"? They've already announced that they will keep approximately 1 of every 3 stores open.

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#6 OFFLINE   Stewart Vernon

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Posted 27 April 2011 - 04:32 PM

I assume you meant to say "close all of the stores"? They've already announced that they will keep approximately 1 of every 3 stores open.

- Merg


I think that would be smart.

Dish could consolidate some of their other remote employees to have a "home" in a Blockbuster store too.

They have technicians all over the country to maintain the LiL uplinks... if they kept some Blockbuster locations around, they could also provide a central location for different groups of DMAs to have a semi-local-office to work out of sometimes.

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#7 OFFLINE   jacmyoung

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Posted 28 April 2011 - 07:41 AM

Forget about the stores, even DirecTV has seen what this deal is about and started asking their subs if they wanted a Netflix like service.

The good thing going with both DBS companies is they have the first runs, add the Netflix type contents and services they can bring Netflix subs back. Whoever is the fastest out the door will have the benefit.

The value of this deal is Blockbuster streaming is already installed on many DVD, smartphones and media players side by side with Netflix.

Edited by jacmyoung, 28 April 2011 - 07:49 AM.


#8 OFFLINE   Stewart Vernon

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Posted 28 April 2011 - 12:57 PM

Forget about the stores, even DirecTV has seen what this deal is about and started asking their subs if they wanted a Netflix like service.

The good thing going with both DBS companies is they have the first runs, add the Netflix type contents and services they can bring Netflix subs back. Whoever is the fastest out the door will have the benefit.

The value of this deal is Blockbuster streaming is already installed on many DVD, smartphones and media players side by side with Netflix.


I agree with that... and suspected that was the major attraction.

But... if Dish also kept some of those locations open as combo retail/installer/tech service locations... they could consolidate some of their resources that they already have spread over the country anyway.

My thought is IF there is any way to make any money by still having Blockbuster retail operations in some locations... Dish should do that and leverage those profits against some of their regional expenses for uplink and customer support that today exists.

Rather than just closing all the locations and being done with Blockbuster...

Dish could sell/install Dish equipment out of these locations... could even still have DVD rentals if they wanted... but also have Dish equipment showrooms where people could walk in and see working Dish equipment... and in the back room they could have a "home" for some of their regional Dish-support needs like their field techs and uplink maintenance crews.

That's what I would do... while also leveraging the streaming services to supplement my satellite offerings.

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#9 OFFLINE   phrelin

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Posted 20 July 2011 - 10:42 AM

This may have turned out to be one of Charlie's many good moves. So many people are mad at Netflix over the rate restructuring and are switching to Blockbuster. It appears somewhat irrational to me. But my wife's cousin just posted on Facebook he switched getting this short-term deal:

Posted Image


Is it good karma or something? How could Dish be so lucky as to have Netflix anger their customers just a couple of months after the Blockbuster acquisition?

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#10 OFFLINE   Ray C@DISH Network

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Posted 20 July 2011 - 10:48 AM

Perhaps he knew something no one else did...

#11 OFFLINE   Paul Secic

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Posted 20 July 2011 - 12:08 PM

This may have turned out to be one of Charlie's many good moves. So many people are mad at Netflix over the rate restructuring and are switching to Blockbuster. It appears somewhat irrational to me. But my wife's cousin just posted on Facebook he switched getting this short-term deal:

Posted Image


Is it good karma or something? How could Dish be so lucky as to have Netflix anger their customers just a couple of months after the Blockbuster acquisition?


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#12 OFFLINE   rasheed

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Posted 20 July 2011 - 12:34 PM

Hello,

There are absolutely no surprises that Netflix was raising rates. Seeking Alpha, Wedbush, etc. all have said this for almost a year now. Clearly customers did not care how much it would cost Netflix for the content, they just wanted cheap movies. If they are upset, great -- are there cheap alternatives, nope (unless they were not really using their Netflix actively and Redbox or something similar would fit the bill).

Netflix planned content acquisition costs are over a billion in committments. This does not even include its flagship one with Starz (StarzPlay - Sony and Disney content) which the CEO himself says could cost $200 million or more versus its current $30 million license deal through next year (already it appears Sony title views has exceeded the Starz/Sony contract limit).

There was two choices for Netflix:

1) Get lots of new customer to help reduce the cost per customer
2) Raise rates

The first one did not happening fast enough. They have added Canada and have Latin America planned, but the available customers in these regions does not seem that many compared to the US market.

I am surprised they put the fee raise on the DVD by mail side and not on the streaming side. I feel they are trying to subsidize the streaming acquisition costs with the DVD by mail revenue a bit. There is little chance that the current streaming price will stay where it is at for the next year. I would expect at minimum annual raises in prices (if not twice a year). Just like a cable or satellite company (ha!).

Now, does Blockbuster have more favorable studio contracts to compete with Netflix on either streaming or DVD use? Would offering in-store exchange be cheaper than Netflix's model? I do not know. There has to be a lot of revenue per square feet to offset the massive B&M costs. Besides, Blockbuster ended up closing all of the stores in our area, so I have no idea if they are really committed to the store model even if they say they will keep some (or reopen) stores.

Rasheed

#13 OFFLINE   Stewart Vernon

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Posted 20 July 2011 - 02:20 PM

Thinking like Charlie for a moment...

Blockbuster pairing with a SAT delivery (Dish) makes more sense to customers who don't like to rent physical discs than does Netflix.

With Netflix you have streaming, and for things not available that way you have to go with DVD rentals. That's it... anything else will require you to sign up for cable or satellite.

Dish is a TV delivery company... so adding Blockbuster streaming + DVD rental puts all of those things in one place.

Bundle deals might convert a lot of Blockbuster customers to Dish and might get some Dish customers to try out Blockbuster.

This could be a big win IF he plays the card right.

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#14 OFFLINE   david_jr

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Posted 21 July 2011 - 07:43 AM

Netflix planned content acquisition costs are over a billion in committments. This does not even include its flagship one with Starz (StarzPlay - Sony and Disney content) which the CEO himself says could cost $200 million or more versus its current $30 million license deal through next year...


Anyone ever wonder what these media conglomerates are going to do with these nearly 7 fold increases in revenue? Maybe they'll start making decent movies again.

#15 OFFLINE   rasheed

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Posted 21 July 2011 - 02:55 PM

Anyone ever wonder what these media conglomerates are going to do with these nearly 7 fold increases in revenue? Maybe they'll start making decent movies again.


I am not so sure that this model is working very well for the studios. Maybe Hulu was put for sale to 'cash-out' or maybe it cannot make good money on its own.

Aside from the endless increases from satellite/cable/phone/streaming providers, DVD sales have almost died. I am sure with the increases, the new world of premium media is higher revenue that DVD sales were (revenue to expenses), but I am not sure it would impact the actual films. I do not even think BluRay will make up that shortfall (especially with HD streaming).

Except, it might make even more senses to do lots of low-budget stuff (already has started with CBS Films and others) since distributions costs will be less (considering both marketing and media costs).

Rasheed

#16 OFFLINE   Wilf

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Posted 22 July 2011 - 05:46 AM

Wasn't the $10 per mo just a promotion for streaming + DVD? Before streaming, wasn't the "new" price for DVD only the same as the old price? Isn't this what cable companies do - try to confuse folks into thinking that the promotional price is the regular price?




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