TESCO yesterday announced the shock acquisition of video on demand service Blinkbox.
The cost of the deal for 80 per cent of the firm was not disclosed but one industry source told City A.M. the price is likely to have been low, based on his knowledge of Blinkbox’s financial figures.
Tesco has bought the stake from Eden Ventures and Nordic Venture Partners. The remaining 20 per cent will stay with the current management team, including founder and chief executive Michael Comish.
A Tesco spokesman told City A.M. it will acquire the management shares subject to them meeting performance criteria.
Tesco added that management will be incentivised to remain in place until year four.
Richard Brasher, Tesco UK chief executive, said, “Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice.
“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.”
Blinkbox, which launched in 2008, was set up by former Channel 4 and Vodafone executives. Comish said: “This partnership represents another step forward, bringing the leading movie streaming service together with the UK’s biggest retailer.”