Blockbuster buys movie download service Movielink

Blockbuster has announced they have bought the online movie download service Movielink. The sale has been in talks since March and originally was reported to be for just under $50 million in cash and stock however it is now being reported as an all cash deal that was much lower than the original price.

The purchase of Movielink will put Blockbuster close to rival Netflix in the movie download business, Movielink currently has more than 3,300 movie downloads compared to Netflix’s 4,000. Blockbuster plans to operate Movielink as an independent business but eventually plans to make parts of the service available in through Blockbuster.com.

Movie downloads still have not really gotten popular with the mainstream however revenue from movie downloads have grown from $11 million in 2005 to $111 million for last year, of course that is still far behind the $25 billion generated last year from DVD and video sales.

Read [Reuters]