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Unread October 4th, 2012, 08:35 PM
SpiceCake SpiceCake is offline
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BREAKING NEWS: Dish Network cancels plans to turn BB into a Netflix competitor

Blockbuster Hits Rewind on Plan to Come Back as a Netflix Rival

"Billionaire Charlie Ergen is giving up on his plan to turn the once-mighty Blockbuster LLC video- store chain into a Netflix (NFLX) Inc. competitor and gadget retailer.

When Ergen’s Dish Network Corp. (DISH) acquired Blockbuster out of bankruptcy in April 2011, Ergen planned to use the stores to sell Dish mobile devices that could be used to stream Blockbuster movies. The plans broke down when U.S. regulators didn’t immediately approve a waiver allowing Dish to use its satellite spectrum for terrestrial data and voice transmission.

“You make a lot of mistakes in business,” Ergen, Dish’s founder and chairman, said in an Oct. 3 interview. “I don’t think Blockbuster is going to be a mistake, but it’s unclear if that’s going to be a transformative decision.”

Dish has begun the process of closing stores that no longer make strategic sense, a plan that will allow Dish to turn a profit on the $320 million acquisition, Ergen said. Some Blockbuster DVD-rental stores can still make money in rural regions, he said. About 900 U.S. stores remained as of August, a fraction of the thousands Blockbuster once operated.

Ergen’s plans for Blockbuster turned sour when the regulatory approval process for his radio-wave licenses took longer than expected. Ergen said he believed the government would approve Dish’s plan in 2011 as it had done for Philip Falcone’s LightSquared Inc., which was also attempting to build a new long-term evolution network.

The government later denied Falcone use of his spectrum due to global-positioning systems interference concerns, causing LightSquared to file for bankruptcy. To avoid a similar outcome with Dish, the government slowed down the approval process for the Englewood, Colorado-based company, which is still waiting for the results of the Federal Communications Commission’s rulemaking.
Retail Stores

Ergen’s airwaves, which Dish agreed last year to purchase from DBSD North America Inc. and TerreStar Networks Inc. for about $3 billion, require new handset devices with a chip that links the satellite spectrum to terrestrial towers. The government’s delay has caused Ergen to change his mind about selling those products in Blockbuster stores.

“When your lease runs out on the stores, you can’t re-up because you can’t make enough money from just selling DVDs,” Ergen said."

(article continues on website)

http://www.businessweek.com/news/201...ireless-delays
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