August 8, 2007 6:50 PM PDT

Blockbuster acquires Movielink

Blockbuster, one of the nation's largest video-rental companies, has acquired Movielink, a video-on-demand service owned by five of the top six movie studios.

Terms of the deal were not disclosed.

Movielink offers digital movie downloads, but none of the competitors in the sector has managed to find much of an audience.

Founded in 2002, Movielink is backed by Universal Studios, Paramount Pictures, Sony Pictures, Metro-Goldwyn-Mayer, and Warner Bros. Studios.

For Blockbuster, the acquisition comes during one of the company's darkest periods. Competition from cable providers offering video-on-demand and DVD-rental services such as Netflix have cut into profits.

The company's stock price hit $7.30 in March, a 52-week high, but closed trading on Wednesday at $4.23. The stock, which was trading at more than $20 in 2002, was up 8 percent to $4.60 in after-hours trading.

The acquisition does give Blockbuster an increased online presence. Movielink owns the rights to more than 3,000 titles, making it the Web's largest digital-movie library.

Analysts say Movielink has failed to catch on because the digital-rights management schemes it uses to protect copyright material are too rigid. Films from Santa Monica, Calif.-based Movielink can't be burned to discs.

A year ago, the company announced that it was working on a plan that would allow people to copy films to DVD. But now, the only way to watch Movielink films on a TV is to buy a set-top box the company offers or create a network between a PC and TV.

That plan is not very attractive considering that a regular DVD costs about as much as a Movielink download and can be played anywhere without any hassle, critics have said.

See more CNET content tagged:
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5 comments

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Maybe they'll add non-Microsoft media playback
MovieLink is too ties to Microsoft's media FORMATS.

Why not Flash? DRM? MS isn't the only game in town for DRM.
But they sure do SUBSIDIZE their media servers to get people
hooked.
Posted by technewsjunkie (1265 comments )
Reply Link Flag
FINALLY!
I knew they would cave and purchase the software instead of writing their own. They just became involved from another company that does set top boxes too. Probably felt pressure.
I own a little stock at 5 dollars and hope it goes to ten but they'll probably need to close more stores.

Actually Blockbuster demoed set top box download services back in 2001 but was too expensive to deploy then since the industry was so closed. No internet services to back it up.
Posted by Blito (436 comments )
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Avex DVD to Mobile Video Suite
Avex DVD to Mobile Video Suite is an All-in-One solution to create Mobile Phone 3GP movies from DVDs, TV shows and downloaded videos. The software combines DVD to 3GP Converter and 3GP Video Converter in one package for discounted price.

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Posted by jvan79 (1 comment )
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Ten Years Too Late
It seems to me that Blockbuster waited about 10 years too late to realize that its business model isn't distribution, necessarily, but consumer knowledge and experience re entertainment content. There's no reason to believe that people will 'shop' via Movielink-rebranded-Blockbuster than they would have before the purchase. The challenge is -- and always has been -- to help consumers find entertainment...and this is something that Blockbuster could have 'owned' because of its rental data history. Putting the name on another interim (or just various) distribution channel is a waste of money, I fear. I've written more about this at DIM BULB, <a class="jive-link-external" href="http://dimbulb.typepad.com," target="_newWindow">http://dimbulb.typepad.com,</a> if you'd like to check it out.
Posted by Jonathansalembaskin (5 comments )
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Will The Movielink Move Help Blockbuster?
Blockbuster is in for the fight of their lives to keep up with Netflix! Netflix is so far ahead of the game and they now have movie downloads.

It may be advantageous for Blockbuster to make this move. My experience with movie downloads is vast, considering I run a movie review site and test these sites personally.

The issue I have with all of them is mainly the selection. There are a few movie downloads sites that have excellent quality, but have a couple of NEW movies I even care to watch.

The company that masters the quality as well as the selection, is going to be the winner. For example: My experience with Amazon Unbox was disappointing, because of the bugs in their software. They fix it, I will give them another chance.

I look forward to the future of movie downloading and there is much room for improvement. I hope to see Vongo and CinemaNow step up to the plate and make the movie download world a better place.

DeWayne(FilmCritic)
MovieDownloadMatrix.com
Movies That Bite Back!
Posted by MovieMatrix69 (2 comments )
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