Tesco Buys Video On Demand Startup Blinkbox

Tesco has announced plans to move into the video-on-demand market with the acquisition of Blinkbox, a video-on-demand start-up.  They now have an 80 per cent share in the company which they bought from private equity firms Eden Ventures and Nordic Venture Partners.  Blinkbox movie-streaming service has been in operation since 2008. So far the firm has grown its movie catalogue to over 9,000 Hollywood titles plus a host of television series.

The announcement of Tesco’s acquisition came a day after the group’s chief executive Phil Clarke said the group needs to improve performance. As UK shoppers spend less because of the economics situation and recent budget changes.  This acquisition by its UK office seems to an effort to create a new revenue stream for the business and will be added to its long list of services that are not supermarket related.  The service is scheduled to launch later this year or early 2012.

Talking about the Blinkbox acquisition  the UK chief executive Richard Brasher said, "Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice.  We want to allow them to decide how they access entertainment content and on which devices, whether it's on PC, TV or tablet."

This acquisition will see Tesco going head to head with other establish providers such as Amazon who already allows you to rent DVD or subscribe to video-on-demand with partner LiveFilm.com. Tesco will also be competing with big brand manufacturers who offer access to their own on-demand service e.g., Sony offers it own Sony’s Video on Demand and Qriocty Music services for owners of its BRAVIA HDTVs.

I think despite the competition Tesco has a lot going for it at the moment that can help to make this acquisition work; for one they hold majority share of the UK’s retail market; they are also one of the leading online retailer in the country.