The future of Blockbuster’s 1,700 stores is largely in the hands of movie studios, Dish Network chief executive Charlie Ergen said Monday.
Douglas County-based Dish, which acquired the video-rental chain out of bankruptcy last week for $320 million, will meet with studios over the next few weeks to determine whether physical storefronts are still a viable way to distribute video content.
“If they want a physical presence, Blockbuster is well-positioned to maintain and grow a physical presence,” Ergen said during a conference call with analysts. “It’s up to the studios as to whether they want a physical presence or whether they want to go all electronically.”
Dish operates about 40 Blockbuster stores in Colorado. The satellite-TV company has roughly three months to provide to a bankruptcy court a list of stores it intends to maintain. It has already accepted leases for 370 stores, a spokesman said.
Dish and Blockbuster have both been stung by the growing popularity of online-video- streaming giant Netflix. But Ergen said he doesn’t view Blockbuster as “being a competitor to Netflix directly in terms of streaming because Netflix has got a formidable lead, and probably insurmountable lead, in that business.”
“On the other hand, it may not be the best economical model for studios,” he said. “Blockbuster can indirectly provide competition out there by presenting a better financial model.”
Michael Kelly, named Monday as president of Blockbuster, said he wants to provide consumers easier access to the 125,000 movie and game titles available at Blockbuster stores and by mail and digital library. Kelly previously served as a Dish executive vice president.
With the Blockbuster acquisition, Dish now employs 5,000 in Colorado and 36,000 nationwide.
Dish also reported Monday that it gained 58,000 net new subscribers in the first quarter, a steep drop from a net gain of 237,000 during the same period a year ago. The company posted first-quarter net income of $549 million on revenue of $3.2 billion. That compares with a net profit of $231 million on revenue of nearly $3.1 billion during the same quarter in 2010.
Dish said rate increases over the past year and a drop in accrued expenses related to its recent TiVo settlement helped the company boost net income.
Dish stock rose $4.75, or 19 percent, to close Monday at $29.79.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
