Supermarket group acquires 80% of video-on-demand firm in bid to take on services such as Amazon's LoveFilm
Tesco has entered the British video-on-demand market, taking an 80% stake in Blinkbox and creating a formidable competitor for existing services such as Amazon's LoveFilm.
The supermarket group, which on Tuesday reported profits of �3.8bn, said the acquisition of the five-year-old British VoD firm would help to position the business for "the next stage in the internet-driven revolution in home entertainment".
Tesco has acquired its stake in Blinkbox, set up by former Channel 4 and Vodafone executives in 2006 and launched two years later, from Eden Ventures and Nordic Venture Partners for an undisclosed sum. Blinkbox offers a range of films and TV shows as free and paid-for downloads, with a catalogue including Shameless, Peep Show and Top Gear.
Britain's biggest retailer has a huge operation selling "physical" DVDs. However, Richard Brasher, chief executive of Tesco's UK operation, admitted that it needed to gain a bridgehead into exploiting growing consumer demand for accessing VoD content online in multiple formats and on different devices.
"Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice," he said. "We want to allow them to decide how they access entertainment content and on which devices, whether it's on PC, TV or tablet."
Blinkbox offers more than 9,000 films and television shows available on devices including the PC, Macs, the PS3 console, tablets and internet-enabled TVs.
The company has content licensing deals with broadcasters and producers such as BBC Worldwide, Channel 4, ALL3Media and FremantleMedia for shows including Peep Show, Shameless, How to Look Good Naked, Doctor Who, Baywatch, Danger Mouse and Count Duckula. Blinkbox also has deals with major US studios and networks including Warner Bros ? two of the most watched shows are Gossip Girl and ER ? Paramount, Discovery Networks, Universal and 20th Century Fox.
"We are pleased that our partnership with Tesco allows us to bring the best in entertainment from our library of over 9,000 titles to even more people across the UK," said Blinkbox founder Michael Comish. "This partnership represents another step forward, bringing the leading movie streaming service together with the UK's biggest retailer."
Amazon acquired the 58% of LoveFilm, the DVD and online video rental company often dubbed "the Netflix of Europe", it did not already own in January in a deal thought to value the business at �200m.
Tesco's Blinkbox deal has been compared with a similar move made by supermarket giant Walmart, owner of the Asda chain in the UK, which acquired US VoD service Vudu in February last year.
Source: http://www.guardian.co.uk/media/2011/apr/20/tesco-vod-blinkbox-stake
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