ENGLEWOOD, CO -- Dish Network Corp., the satellite television provider that acquired BlockbusterInc. last month, has asked NCR Corp. to discontinue using the iconic blue-and-yellow Blockbuster brand on its DVD-rental kiosks.
Dish Network declared the contract with NCR allowing use of the Blockbuster brand void as part of the Dallas movie-rental chain's court-ordered bankruptcy proceedings in early May. But NCR has disputed Dish's claim as "invalid and unenforceable." The Duluth, GA-based company, which currently operates about 9,000 Blockbuster Express kiosks nationwide, said it plans to keep using the Blockbuster name and threatened legal action if necessary. A bankruptcy hearing on the matter is scheduled for May 26.
Under the licensing agreement signed in 2008, NCR owns and operates its kiosks and pays Blockbuster a royalty for using its brand. NCR negotiates directly with studios for DVDs.
If Dish successfully voids the contract, the Englewood, CO-based company will have the option to operate the DVD venders itself, renegotiate terms with NCR or designate another kiosk operator to license the name.
Dish Network offers video-on-demand and pay-per-view to its satellite TV customers. The company has said its strategy is to combine Blockbuster stores, kiosks, online streaming service and mail rentals with its satellite TV service to deliver content to more viewers.
Dish completed its $320 million acquisition of Blockbuster on April 26. Blockbuster filed for bankruptcy in September 2010 with 5,600 stores, including 3,300 in the U.S. The once-dominant movie-rental chain had been struggling to compete in an environment where more consumers are renting movies from Redbox self-service kiosks and through subscription services like Netflix rather than through stores.
Blockbuster reportedly lost a total of $1.1 billion since the beginning of 2008 and closed nearly 1,000 stores in the last year alone. | SEE STORY