Vodafone has held talks with Tesco about buying its loss-making video streaming service Blinkbox, as the telecoms company seeks to bolster its TV and content operation ahead of a launch into home broadband next year.
Tesco acquired Blinkbox, which was set up by former Channel 4 and Vodafone executives, three years ago to try to create a UK competitor to Amazon’s LoveFilm – now rebranded Amazon Prime Video – and Netflix.
In October, Dave Lewis, Tesco’s new chief executive, decided the eight-year-old video business will be sold, or shut, as the retailer refocuses on its core, ailing grocery business.
Vodafone is understood to have held talks about taking over Blinkbox, which made a loss of almost £20m in its last financial year, and one source cautioned that there is no guarantee a deal will be reached.
By buying the company, Vodafone could pave the way for an entrance into pay-TV and home broadband market next year.
Blinkbox offers more than 10,000 films and TV shows on devices including PCs, Macs and tablets, and has content licensing deals with partners including BBC Worldwide, Channel 4 and film studios such as Fox and Universal.
Last September, Vodafone hired Cindy Rose, the former executive director of digital entertainment at Virgin Media, as UK consumer director.
Rose, an ex-Disney senior executive, was responsible for launching Virgin Media’s TiVo TV service in the UK.
Vodafone’s interest in the TV and content market follows rival EE, the UK’s biggest mobile operator, launching a set-top box to expand into offering customers a TV service.
The mobile phone company’s move comes as telecoms rival BT holds talks with EE and O2 about a potential takeover.
Reports emerged last week that Vodafone may also be interested in John Malone’s Liberty Global, which owns Virgin Media in the UK.
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