May 16, 2011

Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks

Now that Blockbuster goes bankrupt, Dish says NCR contract invalid. And so the fight begins...

Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks - Bloomberg
Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks
By Alex Sherman - May 13, 2011 4:22 PM MT

Dish Network Corp. (DISH), the U.S. satellite-TV provider that acquired Blockbuster Inc. (BLOAQ) last month, told NCR Corp. (NCR) that its contract to license the Blockbuster name on movie-rental kiosks is invalid.

Dish rejected the contract as part of Blockbuster’s court- ordered bankruptcy proceedings and sent NCR a termination letter, expressing its intent on ending the pact, NCR spokesman Jeff Dudash said. NCR disagrees with Dish’s conclusion that the contract is void, and plans to continue to brand its movie kiosks with the Blockbuster Express name, Dudash said.

“There will be legal proceedings to address this that will come up at the end of the month,” Dudash said. No lawsuits have been filed yet by either company.

NCR builds kiosks, often placed in grocery and convenience stores, that allow customers to rent and drop off movies. The company pays Blockbuster for the use of its brand and collects all revenue from rentals. NCR says the Blockbuster Express name, design and related trademarks are held by a trust that wasn’t part of Blockbuster’s bankruptcy filing. Duluth, Georgia-based NCR has branded more than 9,000 kiosks with the Blockbuster name, Dudash said.

If Dish successfully voids the contract, the Englewood, Colorado-based company will decide whether it wants to own the kiosk business, renegotiate deal terms with NCR or find another company that makes kiosks to license the name.

“Blockbuster continues to evaluate the kiosk-rental business and the variety of ways we provide access to our expansive inventory of family entertainment,” Marc Lumpkin, a Dish spokesman, said in an e-mail.

Uniting the Blockbuster brand under the Dish umbrella isn’t a priority for NCR, according to Dudash, who said NCR has become comfortable licensing the name.

“It’s something we’ve been doing for several years,” said Dudash. “The business falls in line with our strategic priorities to use our expertise in self-service technologies to deliver entertainment to consumers.”

Dish completed its $320 million acquisition of Blockbuster on April 26. Blockbuster filed for bankruptcy in September with 5,600 stores, including 3,300 in the U.S.

Dish fell 39 cents, or 1.3 percent, to $28.81 at 4 p.m. New York time on the Nasdaq Stock Market. NCR lost 25 cents to $19.55 in New York Stock Exchange composite trading.

Posted by staff at May 16, 2011 12:38 PM