Dish wants NCR to remove Blockbuster name from video rental kiosks (1 Viewer)

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Mojo Jojo

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From Dallas-Fort Worth News, Sports, Entertainment, Weather and Traffic - The Dallas Morning News


Dish wants NCR to remove Blockbuster name from video rental kiosks


By MARIA HALKIAS
Staff Writer
mhalkias@dallasnews.com
Published 12 May 2011 06:48 PM



Dish Network Corp. has told NCR Corp. to stop using the Blockbuster brand on its movie rental vending kiosks.
NCR operates about 9,000 of the big blue and yellow Blockbuster Express kiosks, including 300 in North Texas. As recently as April, NCR said it planned to increase the number to 11,000 by year-end.

Option to reject
As part of Dish’s bankruptcy court-approved acquisition of Dallas-based Blockbuster last month, the Englewood, Colo.-based satellite network operator has the option to accept or reject contracts and leases.
Dish Network and Blockbuster “have exercised their rights to direct NCR Corp. to cease using certain trademarks under the NCR agreement,” said a court document filed Tuesday in New York.
Dish also said it’s rejecting a joint marketing agreement with NCR as of May 26, when a bankruptcy court hearing is scheduled.
The move to strip NCR of the Blockbuster name is “invalid and unenforceable,” said NCR spokesman Jeff Dudash.
Licensing terms
The trademark licensing agreement is held by a trust that wasn’t part of Blockbuster’s bankruptcy filing last September, Dudash said. “Blockbuster is a beneficiary of that trust, but Dish can’t terminate the trademark agreement.”
In the court filing, Dish said it has instructed the trustee to terminate the license. Dish may want to operate the kiosk business itself instead of just receiving royalties.
A Blockbuster spokesman said the company “continues to evaluate the kiosk rental business and the variety of ways we provide access to our expansive inventory of family entertainment.”
Under the trademark usage license that dates back to 2008, NCR owns and operates the kiosk and pays Blockbuster fees for using its brand. Duluth, Ga.-based NCR negotiates directly with studios for DVDs.
NCR is installing Blockbuster Express kiosks in 309 RaceTrac convenience stores in Texas and other states.
In North Texas, NCR already has kiosks at 7-Eleven and QuikTrip convenience stores and Tom Thumb, Brookshire and Fiesta supermarkets.
 
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Claude Greiner

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It would be more benificial for Dish to leave the blockbuster name on those Kiosks for name reconition only and to establish a presence in the marketplace.

Dish either needs to purchase all the Kiosks from NCR, or continue to let them to use the name
 

Tampa8

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What I think this is about is Dish establishing they have the right to any agreement Blockbuster had, and have the right to exercise whatever was in that agreement. It is possible the agreement was indeed ended with acquisition all depends on the actual agreement of course. "As part of Dish’s bankruptcy court-approved acquisition of Dallas-based Blockbuster last month, the Englewood, Colo.-based satellite network operator has the option to accept or reject contracts and leases." That is very common.

I can tell you, being held in trust means nothing at all in and of itself, if that is what NCR is hanging their hats on. It can and often easily is determined any and all agreement the former business had is ended when bankruptcy sales are made. Again, all depends on the actual agreement.
It reads to me NCR wanted to continue on like nothing has changed, Dish took exception to that.
 
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JosephB

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I don't know if I understand this, unless DISH is going to get out of the kiosk business completely. If they are planning to stay in the kiosk business, but do it themselves, then this is simply shooting themselves in the foot. Going from 9k locations to zero only to start over is stupid. And, those 9,000 locations won't be available for the DISH-owned/operated ones. If they plan to do their own kiosks, they should have worked out a transition plan. This seems to me that they're getting out of the kiosk business totally.
 

yaz96

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I don't know if I understand this, unless DISH is going to get out of the kiosk business completely. If they are planning to stay in the kiosk business, but do it themselves, then this is simply shooting themselves in the foot. Going from 9k locations to zero only to start over is stupid. And, those 9,000 locations won't be available for the DISH-owned/operated ones. If they plan to do their own kiosks, they should have worked out a transition plan. This seems to me that they're getting out of the kiosk business totally.

If Dish wants to start from scratch, it will be easy. Those 9,000 locations are just a drop in the bucket. There are plenty more locations available for kiosk placement. This way they get all the profit, and not just a licensing fee from NCR.
 

JosephB

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True, but if they worked out a transition plan they wouldn't have to do all that work. For the money they're going to spend on developing a kiosk, developing software, getting a network of sales people in place, etc. they could have likely bought NCR out.
 

yaz96

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True, but if they worked out a transition plan they wouldn't have to do all that work. For the money they're going to spend on developing a kiosk, developing software, getting a network of sales people in place, etc. they could have likely bought NCR out.

That would definitely have been the easy way, but maybe NCR wasn't/isn't interested in selling.

And those kiosks are already available, they just buy them from the manufacturer, slap on a BB sticker, and you're good to go.

Maybe after this, NCR will sell out.
 

Laddyboy

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That would definitely have been the easy way, but maybe NCR wasn't/isn't interested in selling.

And those kiosks are already available, they just buy them from the manufacturer, slap on a BB sticker, and you're good to go.

Maybe after this, NCR will sell out.

Retail kiosks are a principal product line for NCR so I'm guessing NCR is the manufacturer. I'm not sure that Dish really wants to compete in that low margin market with NCR and Redbox. They may just want to control the brand name. We'll see. I think NCR would do just fine with a different name. I prefer the NCR kiosks over Redbox because they allow for using promo codes on online reservations while Redbox doesn't.
 

JosephB

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That would definitely have been the easy way, but maybe NCR wasn't/isn't interested in selling.

And those kiosks are already available, they just buy them from the manufacturer, slap on a BB sticker, and you're good to go.

Maybe after this, NCR will sell out.

NCR is the manufacturer.

I'm assuming that Dish is getting out of the business. They wouldn't have made such a quick demand for NCR to stop using the name if they had a plan for their own kiosks.
 

yaz96

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I don't think anyone said that. What we said was that NCR likely makes its own kiosks as that's a principal component of their business.

And I really didn't know.

I'm guessing NCR would keep their business and rename it, since it is established.

And, if Dish desires to get in the game, they will just purchase kiosks from whoever they choose, not necessarily from NCR.
 

JayStil

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NCR calls their kiosks "Blockbuster Express". I believe they manufacture them as well. I've been trying to place one in my business for awhile now. Demand is high, they're a little difficult to come by.
 
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r10fret

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Dish looking for another legal battle to loose millions fighting, NCR has the rights to the name, NCR will take you to the bank charlie!
Dish you will now be counter sued and told to stop using the "Blockbuster" name which NCR is the sole owner of.
 

mike123abc

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Dish looking for another legal battle to loose millions fighting, NCR has the rights to the name, NCR will take you to the bank charlie!
Dish you will now be counter sued and told to stop using the "Blockbuster" name which NCR is the sole owner of.

Nah this will not cost Dish hardly anything. It will be decided by the bankruptcy judge. Both sides will probably submit a brief and the judge will rule. The judge will decide if the NCR agreement is subject to the bankruptcy or not and if the agreement can be nullified by the bankruptcy.
 

Mojo Jojo

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Update: Dish Network, NCR Spar Over Blockbuster Brand Use on Movie-Rental Kiosks

From [URL]http://www.bloomberg.com/news/2011-05-13/dish-ncr-fight-for-rights-to-blockbuster-brand-in-movie-rental-kiosks.html:[/URL]

Dish Network, NCR Spar Over Blockbuster Brand Use on Movie-Rental Kiosks

By Alex Sherman - May 13, 2011 5:22 PM CT
Dish Network Corp. (DISH), the U.S. satellite-TV provider that acquired Blockbuster Inc. (BLOAQ) last month, told NCR Corp. (NCR) that its contract to license the Blockbuster name on movie-rental kiosks is invalid.
Dish rejected the contract as part of Blockbuster’s court- ordered bankruptcy proceedings and sent NCR a termination letter, expressing its intent on ending the pact, NCR spokesman Jeff Dudash said. NCR disagrees with Dish’s conclusion that the contract is void, and plans to continue to brand its movie kiosks with the Blockbuster Express name, Dudash said.
“There will be legal proceedings to address this that will come up at the end of the month,” Dudash said. No lawsuits have been filed yet by either company.
NCR builds kiosks, often placed in grocery and convenience stores, that allow customers to rent and drop off movies. The company pays Blockbuster for the use of its brand and collects all revenue from rentals. NCR says the Blockbuster Express name, design and related trademarks are held by a trust that wasn’t part of Blockbuster’s bankruptcy filing. Duluth, Georgia-based NCR has branded more than 9,000 kiosks with the Blockbuster name, Dudash said.
If Dish successfully voids the contract, the Englewood, Colorado-based company will decide whether it wants to own the kiosk business, renegotiate deal terms with NCR or find another company that makes kiosks to license the name.
“Blockbuster continues to evaluate the kiosk-rental business and the variety of ways we provide access to our expansive inventory of family entertainment,” Marc Lumpkin, a Dish spokesman, said in an e-mail.
Uniting the Blockbuster brand under the Dish umbrella isn’t a priority for NCR, according to Dudash, who said NCR has become comfortable licensing the name.
“It’s something we’ve been doing for several years,” said Dudash. “The business falls in line with our strategic priorities to use our expertise in self-service technologies to deliver entertainment to consumers.”
Dish completed its $320 million acquisition of Blockbuster on April 26. Blockbuster filed for bankruptcy in September with 5,600 stores, including 3,300 in the U.S.
Dish fell 39 cents, or 1.3 percent, to $28.81 at 4 p.m. New York time on the Nasdaq Stock Market. NCR lost 25 cents to $19.55 in New York Stock Exchange composite trading.
To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
 

JosephB

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NCR manufactures ALL DVD rental kiosks?

I just Googled and saw quite a few different ones out there.

NCR is the manufacturer of the current DVD kiosks. I'm sure Redbox's kiosks are manufactured by someone else, but I'd be willing to bet they have a lock on those machines. Either way, going from 9,000 locations to zero only to try to start over would be monumentally stupid. I have to believe DISH wants to get out of that business completely. I suspect they may want to get out of the physical media business completely eventually.
 

yaz96

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NCR is the manufacturer of the current DVD kiosks. I'm sure Redbox's kiosks are manufactured by someone else, but I'd be willing to bet they have a lock on those machines. Either way, going from 9,000 locations to zero only to try to start over would be monumentally stupid. I have to believe DISH wants to get out of that business completely. I suspect they may want to get out of the physical media business completely eventually.

They wouldn't be going from 9,000 to zero. They (Blockbuster/DISH) currently have zero. NCR (Blockbuster Express) has 9,000.

NCR keeps their business with a new name. DISH/Blockbuster starts fresh with BB kiosks.

If BB/Dish had no plans to stay in the kiosk game, why would they care if NCR still uses the name? They still keep getting the licensing fee for use of the BBE name, and no skin off their backs because it is not competition.
 

JosephB

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They wouldn't be going from 9,000 to zero. They (Blockbuster/DISH) currently have zero. NCR (Blockbuster Express) has 9,000.

NCR keeps their business with a new name. DISH/Blockbuster starts fresh with BB kiosks.

If BB/Dish had no plans to stay in the kiosk game, why would they care if NCR still uses the name? They still keep getting the licensing fee for use of the BBE name, and no skin off their backs because it is not competition.

In terms of customer perception, they'd be going from 9,000 kiosks to zero kiosks. Whoever owns the current kiosks doesn't matter to the average consumer. All that current Blockbuster members know is that the kiosks they were able to get DVDs out of via their subscription no longer take their subscriptions, and they either have to find another kiosk location (which, as of right now there are none) or switch to something else (redbox, stick with whatever NCR does, etc).

I don't really care if DISH stays in the business or not, I don't use kiosks. However simply as a matter of business and marketing, I can't see the logic in immediately pulling the Blockbuster name off all those kiosks and starting over.
 

jerryez

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Funny that no one has brought up the option that Dish may want more money for the Blockbuster name franchise. The cancelation is negotiating strategy. Next Dish ask for more money for the useage of the name.
 
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