Satellite TV provider Dish Network wants to become satellite TV and video-rental retailer Dish Network. It announced today that its bid of $320 million ($228 million in cash) was enough to win the auction to buy Blockbuster, the venerable, ailing video chain that went bankrupt last September. Assuming that the sale goes through, Dish will get itself 1700 stores and other Blockbuster properties, such as its on-demand services for PCs, phones, and set-top boxes.

Dish’s statement was optimistic, but cautiously so:

“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISHNetwork,” said Tom Cullen, executive vice president of Sales, Marketing and Programming for DISH Network. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”

The company presumably has a more detailed strategy for getting bang out of its 228 million bucks. I can see the appeal of having 1,700 physical locations where it can show consumers its satellite service and sell it to them. But I wonder whether it sees a real future for the distribution of entertainment on shiny little discs at pricey storefronts. And I’m curious whether it’s impressed with Blockbuster’s digital distribution offerings, which are pretty antiquated compared to those of Netflix.

Back when Blockbuster declared bankruptcy, I said I gave it three years before it vanished altogether from the nation’s strip malls. The Dish deal may give it a new lease on life. But physical-media retailing still seems like it’s a business that’s doomed to largely vanish before this decade is over. Offhand, I can’t think of many examples of a retail business being as battered as Blockbuster is, then bouncing back.

Then again, the Dish folks seem smart and inventive–they saw Google TV as an opportunity rather than a threat. And it shouldn’t be hard to run Blockbuster better than the old management did. It would be kind of fun if it bucked fate and remained with us in some form.

 
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