Typically when a company drops $320 million on a purchase, you would think they would have a clear idea of their plans. To hear Dish Network CEO Charlie Ergen talk about the fate of Blockbuster Video, that wouldn’t seem to be the case.
Speaking during the company’s quarterly earnings call with analysts on Monday, Deadline reports that Mr. Ergen sent some very mixed signals about what will be happening with Blockbuster. On one hand he says it will roll out like an episode of Seinfeld wherein you won’t know how it’s all going to come together until the last two minutes, but then he says they still need to talk to the Hollywood studios about what they want.
While it has been believed Dish Network would leave at least a few hundred of the stores open, it seems that only about 370 of the remaining stores are actually profitable. In an effort to decide what they should do, that is why Dish Network will be talking with the studios to see what they would like to have happen. There is some talk of gutting the retail stores and using the brand name for just a streaming service, but even that presents problems. “(Netflix) has a formidable and perhaps insurmountable lead,” Ergen said of the current streaming video market leader, making it sound like that is not really a market he wants to compete in.
Ergen said that the company could gut the business and sell off all of its physical assets if it the need arises to make its investment back. While it seemed that the brand would continue in its current form when it was purchased, it would seem that Dish Network bought the company without any clear idea of exactly what they could do with it. They assuredly had their own ideas, but it sounds like those have changed drastically since the purchase was made.
It has been a long and strange day for Dish as it has also announced it has finally settled its years long patent dispute with TiVo for $500 million, while also announcing a huge quarter for profits. Net profit for the first quarter hit $549 million, up a stunning 138 percent year-over-year off of gross revenues of $3.2 billion. The earnings came out to a $1.22 per share, coming close to doubling the estimates that had been running around 68 cents a share.
All in all things are looking good for Dish Network … now, if they could figure out to do with the sinking ship that is Blockbuster.
What do you think Dish Network should do with Blockbuster Video?