Charlie Ergen, the founder of Dish Network Corp., acquired Blockbuster in 2011 for $320 million, but it appears that his ambitions to reinvigorate the rental service and compete with Netflix have been extinguished.
At first, Ergen states, "There was very little risk in buying. Worst case we break even or make a little bit of money."
The company originally planned to take advantage of a long-term evolution network, but due to delayed certification by the Federal Communications Commission, Dish has been unable to build a competitive user base to battle Netflix with.
"Netflix at first paid for 5 million customers and they got 25 million. But now people are saying, 'OK, you're going to get 30 million customers, so you're going to pay for 30.' If Netflix can get 40 or 50 million, they'll be fine. But if they don't get to 30, they're probably going to go pfft," says Ergen.
Dish will now proceed strategically closing what's left of Blockbuster's 900 stores, hoping to make a profit off of its investment now that its window of opportunity to make Blockbuster competitive has failed.
The Dish founder notes, "You make a lot of mistakes in business. I don't think Blockbuster is going to be a mistake, but it's unclear if that's going to be a transformative decision."
"Worst case, we'll take our money after having wasted some time, not much money, and life goes on," asserts Ergen.
Blockbuster is just one of the many rental store casualties that have been slain in the scramble to rebel against Netflix's reign.
This is the end of an era, nearly a decade in the making.
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