Dish Network Wins Blockbuster Bid

“Win” may not be the right word but Dish Network Corp. was the top bidder in the bankruptcy auction forBlockbuster, the has-been chain of video rental stores, offering $320.6 million for the company's assets.

What it plans to do with the stores is anyone's guess, although the industry speculation is that Dish wants to get into the streaming video business, to compete with Netflix, the upstart that broke Blockbuster's hold on the video rental market.

"With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities," said Tom Cullen, Dish's executive vice president of sales, marketing and programming.

"While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment," he said.

Of course, getting into the streaming video business isn't as easy as plugging in a couple of DVDs players.

While it acquires some licensing deals in its Blockbuster acquisition, Dish would still have to negotiate longer-term deals with the major studios. However, it brings significant leverage to that task, thanks to its nationwide satellite TV network, which already has deals with most major program producers.

The acquisition comes as Dish tries to take its satellite network upscale. It previously targeted lower-income consumers, who have been hard-hit by the economic downturn. Now, Dish has been trying to attract more affluent customers, hoping to sell them more expensive service bundles.