Dish wants NCR to remove Blockbuster name from video rental kiosks

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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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

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