TalkTalk has emerged as a potential buyer for Blinkbox; the Tesco owned video streaming service that has been operating at a loss.
Many believe a deal is imminent, as Dave Lewis, the new chief executive of Tesco, is to unveil a strategy to turn round Britain’s biggest retailer and confront its losses. This strategy is likely to focus on strengthening the retailer’s core grocery business at the expense of its peripheral services, such as Blinkbox.
Tesco built up the Blinkbox brand through a series of acquisitions beginning in 2011, but documents reveal the company has been making heavy losses. According to stats from Companies House for the year to February 2013, Blinkbox and its subsidiaries suffered a combined post-tax loss of £24.7m on total revenues of £3.5m.
TalkTalk’s wish to acquire Blinkbox is reflective of a growing trend in the UK telecoms industry to attract and retain subscribers to their broadband, landline and mobile businesses through a bundling of services.
Buying Blinkbox, which provides a streaming service for movies, TV and music similar to Netflix, would accelerate this growth and give TalkTalk access to hundreds of thousands more customers. A video streaming service would bolster TalkTalk’s TV business, which is already the fastest growing TV provider in the UK with more than 1.2m customers.
Those familiar with the situation have acknowledged that such a deal between TalkTalk and Tesco could yet fall apart. TalkTalk is not the only telecoms group to have held talks with Tesco. Vodafone has previously looked at acquiring Blinkbox.
DTG Staff | 05.01.2015