Dish Closing 300 Blockbuster Stores

Posted by Sam Churchill on

Dish Network plans to close 300 Blockbuster stores in the United States in the coming weeks, reports Reuters, and could lay off as many as 3,000 employees, a move that comes days after the DVD rental firm’s UK unit went into administration, the British term for bankruptcy proceedings.

The potential job cuts represent about 40 percent of Blockbuster’s U.S. workforce of 7,300 people. The company currently has about 800 stores across the country. Blockbuster’s UK operations went into administration on January 16 and Deloitte was appointed to seek a buyer for all or parts of the business.

Blockbuster was unable to compete with Redbox’s low-cost DVD rental kiosks or online streaming services from Netflix, Amazon Instand Video and Apple TV or Google Play.

Netflix Q4 earnings show 27 million subscribers in the US and 6 million outside the country, with 2 million new customers streaming in the US.

Why did Dish Network, the second-largest U.S. satellite TV company, buy Blockbuster in a 2010 bankruptcy auction for $320 million?

It was all about Blockbusters streaming movie rights, say industry observers. The Blockbuster Movie Pass and Blockbuster@Home include some 3,000 movie titles available to stream to your TV, using your broadband connected receiver. Additionally, subscribers can rent more than 100,000 DVD titles by mail.

Dish now owns streaming rights that compliment their wireless spectrum. A two-way hybrid satellite and wireless network can deliver subscription broadcast TV as well as on-demand services to tablets and phones.

A new Bell Labs study suggests by 2020, consumers in the United States alone will access seven hours of video each day, up from 4.8 hours today, and will increasingly consume this additional video on tablets, both at home and on the go.

If “wireless cable” is feasible, then it’s going to happen either on Dish’s 40 MHz of 2.1 GHz spectrum or on Sprint’s 2.6 GHz band. Whoever owns that spectrum, is positioned to deliver wireless cable.

Spending $10 billion on new nationwide LTE infrastructure is an expensive bet. But a cost/effective deal to share the current infrastructure owned by legacy carriers may only happen over the dead bodies of AT&T, Verizon, Sprint and T-Mobile.

Clearwire CTO John Saw said that the operator is eyeing both broadcast and unicast for video delivery and is looking forward to advanced eMBMS features that will be included in 3GPP Release 12, according to, slated for implementation in June 2014.

Only an outsider like Carlos Slim or Telefonica might be willing to take on the established US carriers … and they’ll probably need domestic partnerships to pass FCC muster. Google could green light a nationwide wireless network in partnership with Dish if they don’t go with Sprint/Softbank. Or they could wait until unlicensed 3.5 GHz microcells become feasible – perhaps in 3-4 years.

Google could even deliver a total wireless solution, buying 600 MHz spectrum next year (for long range macrocells) with 2.6 GHz (for high density small cells).

There are lots of unknowns, but the growth of tablets and video seems certain.

This is my narrative, and I’m sticking to it.

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Posted by Sam Churchill on Wednesday, January 23rd, 2013 at 8:37 am .

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