TalkTalk is pursuing a buyout of Tesco’s video streaming service Blinkbox, it has been reported. The UK supermarket’s chief executive Dave Lewis will announce his strategy for improving the finances of Tesco and it is expected that further details of the Blinkbox deal will also be unveiled.
Tesco’s sale of the business would demonstrate Lewis’s cost-cutting agenda and a refocus on the retailer’s UK grocery business, the Financial Times reports. TalkTalk could use Blinkbox to bolster its TalkTalk TV business, which has more that 1.2 million customers.
Vodafone is also said to have looked into Blinkbox, which analysts say could be worth about £14 million, according to previous reports.
Blinkbox was set up by former Channel 4 and Vodafone executives, and acquired by Tesco in 2011, in a bid to create a competitor to Netflix and Amazon’s LoveFilm. The supermarket chain took an 80 per cent stake in Blinkbox, which was owned by Eden Ventures and Nordic Venture Partners, for an undisclosed sum. The service offers a ‘pay as you watch’ service, which provides users with movies and TV shows, without having to pay a subscription fee. Content can be rented for a limited period, or purchased for viewing on up to five devices.
It is reported that the streaming service lost £24.7 million last year on turnover of just £3.5 million. Tesco last September confessed to have overestimated its first half profits by £250 million. The retailer’s share price fell dramatically, four senior managers were suspended and an investigation by the Financial Conduct Authority was announced.