The UK’s number one grocer Tesco has strengthened its home entertainment offering today by acquiring the majority stake in video-on-demand e-business Blinkbox.
Blinkbox streams films to two million customers every month and with an increasing amount of entertainment product sales being made online, the move is a strong indication of Tesco’s commitment to developing its non-food channels in the UK.
Eden Ventures and Nordic Venture Partners sold Tesco an 80 per cent stake in Blinkbox, which has a catalogue of over 9,000 titles available to rent or buy, as well as a selection of free-to-view movies, TV shows and trailers.
Products from the streaming service can be viewed on PC, Mac, PS3 console, tablet devices and internet-enabled connected TVs, all of which are increasingly popular platforms for consuming entertainment.
Amazon’s Kindle e-reader for books and music downloading services such as Apple’s iTunes have helped change the entertainment retail landscape in recent years, and movie downloads replacing physical DVD sales is another part of this evolutionary process.
Tesco acquisition shows that the company is very much aware of these changing consumer habits, and it comes one day after the group announced flat sales in the UK for 2010/11 financial year.
Sluggish sales growth in general merchandise, clothing and electricals was a feature of the results announcement, with just a 0.4 per cent year-on-year rise reported for these categories, and new CEO Philip Clarke acknowledged that a better performance was required from its UK operation in the months ahead.
Richard Brasher, who was appointed Tesco UK CEO earlier this year when Clarke chose his management team for the group’s biggest market, welcomed today’s announcement and indicated that it will offer customers something different.
“The acquisition of Blinkbox, together with a range of other services currently in development, means we can link physical purchase of a product to the building of digital collections in a new and seamless way,” he explained.
“Working with the Blinkbox team and our content partners, we will bring these compelling propositions to life for our customers.”
Blinkbox CEO Michael Comish said it is an exciting time for such a partnership considering “how accessible entertainment is becoming for consumers”.