Korea's SK Telecom mulls bid for Blockbuster
updated 08:25 am EDT, Thu March 31, 2011
SK Telecom may buy out Blockbuster
Korean cell carrier SK Telecom said Thursday that it was contemplating making a bid for the struggling video chain Blockbuster. An official didn't explain the motivations, but it's suspected the deal would be an attempt to diversify away from its Korea-only network, where it leads but has a tough fight with KT and LG Telecom. Daewoo Securities analyst Byun Sung-jae told the WSJ that SK Telecom might feel oversaturated but could thrive in Internet video, where Blockbuster's content rights would be advantages.
Blockbuster had declared bankruptcy in September. It eventually decided to sell itself off using an investment group as a "stalking horse" bidder that would guarantee at least a $290 million bid. The company has had little success moving away from traditional, store-based video rentals and has mostly been crushed by Netflix, whose superior catalog and cheaper rates have led to Blockbuster closing hundreds of stores.
Blockbuster has tried Redbox-style kiosks and years ago bought CinemaNow for its digital video service, but it has had little traction versus Netflix and iTunes apart from limited success on Android devices.
SK Telecom has tried to get into the US before through its short-lived partnership with Earthlink for the carrier Helio, but it had little success. The network appealed mostly to ex-patriate Koreans and to those who wanted unlimited data but were still happy with basic feature phones at a time when the iPhone, and eventually Android, were becoming much more popular. It eventually sold off Helio to Virgin and exited the US almost entirely.
