Blockbuster bags Movielink

Blockbuster has acuired Movielink LLC, the online movie downloads service established by five major Hollywood studios in 2002. Terms were not disclosed.

The Wall Street Journal claims a source familiar with the deal put the acquisition price tag at “less than $20 million”. paidContent puts it lower still: “we do know that there is a surprisingly low cash amount involved (much lower than WSJ’s)” 

Update 15 Aug 07: According to a filing yesterday with the U.S Securities and Exchange Commission, Blockbuster paid just $6.6 million in an all-cash deal.

Studio founders including Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. are believed to have lavished $100 million on the service, which failed to capture public imagination as a consequence of its owners’ failure to back it up with significant marketing effort.

The acquisition bolsters Blockbuster’s online video services and will likely put troubled competitor Netflix under even greater pressure.

VOD a fillip for Xbox Live

Good to see more content providers experimenting with reaching young audiences who may prefer to watch movies or TV via a games console, as profiled in this NY Times piece.

The Xbox Live Marketplace offers around 2,000 hours of downloadable content: a mix of download-to-own, download-to-rent (US $2 to $6 for a 24-hr viewing window) and free. contentonce downloaded, can be viewed for up to 24 hours. There’s some HD content, as well as exclusive stuff: a premiere episode of South Park was downloaded 400K times, when offered.

Among Microsoft’s content partners on the service are Paramount Pictures, New Line, Warner Bros., MTV, CBS, A&E and ABC.

“It’s where entertainment delivery is headed,” says Anita Frazier of industry analysts NPD Group. “It’s a natural evolution for any of these boxes, whether it’s a computer or an Xbox or a PlayStation 3 or Apple TV to deliver a variety of content and whether it’s games or music or TV or movies,” she adds. 

Most interesting of all, Microsoft cites “double digit” growth of VOD revenues from the service, every month since introduced.