Buying Blockbuster Could Help Dish Compete with Netflix (Analyst)

11:50 AM PST 04/01/2011 by Georg Szalai

The video rental firm could allow Dish access to content for a potential service "that could end up competing with Netflix down the line," Wells Fargo analyst Marci Ryvicker says in a report.

NEW YORK -- Charlie Ergen's Dish Network could use an acquisition of video rental company Blockbuster to compete with Netflix, according to one Wall Street analyst.

"We think that Blockbuster could be the way that Charlie Ergen gets content for a potential over-the-top [broadband] product -- one that could end up competing with Netflix down the line," Wells Fargo analyst Marci Ryvicker said in a report.

Ryvicker said buying Blockbuster could also help Dish's VOD service.

The Wall Street Journal had reported earlier on Friday that Dish and activist investor Carl Icahn were among bidders for Blockbuster ahead of an auction for the company next week.

"We view the potential news as a positive," Ryvicker said about Dish's look at Blockbuster. "The more data points we glean, the more it sounds like Charlie Ergen has a plan to stay relevant in an evolving video world. We had often thought that Charlie Ergen is interested in providing an over-the-top product, but the one piece we were missing was how to get content. Blockbuster may be the [first] answer."

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