Download site launched by studios in 2002
Blockbuster, which first tried to buy movie download service Movielink for $70 million a year ago, paid just $6.6 million in an all-cash arrangement last week when it finally closed the deal, according to a filing Tuesday with the Securities and Exchange Commission.
Blockbuster announced last week that it had acquired the movie download site, which was launched by five major studios in 2002. Those backers reportedly have sunk $100 million into the startup.
In its filing, Blockbuster said it bought the site from MGM On Demand, Digico, SPDE-MF Holdings, Universal VOD Venture Holdings LLC and WB-MF LLC.
The retailer’s original $70 million offer for Movielink was rejected. In March, rumors surfaced that talks were back on, this time with a $50 million pricetag.
It’s unclear exactly why the price slid so much in the last year.
However, during that time, more big-name companies from Amazon.com to Wal-Mart have entered the download business. All the while, sales remain small.
Last week, Google, one of the first major companies to begin selling video downloads, said it would close its paid video download business.