Blockbuster Inc. Acquires Movielink, LLC

Blockbuster Inc. Acquires Movielink, LLC

Deal Includes Content Agreements With Major Studios

Gives Blockbuster Access to One of the Largest Libraries of Downloadable Movies

DALLAS, Aug. 8 /PRNewswire-FirstCall/ -- In a move to further provide customers with even more convenient access to home entertainment, Blockbuster Inc. (NYSE:BBI) (NYSE:BBI.B) today announced it has acquired Movielink, one of the nation's leading movie download services. The acquisition gives Blockbuster access to one of the largest libraries of downloadable movies and a large array of television content. Terms of the agreement were not disclosed.

With thousands of movies and television shows available in its digital library for downloading, Movielink offers customers the ability to legally download entertainment content for rental (VOD) and for purchase (EST). The service was created in 2002 by Movielink, LLC, a joint venture of Metro- Goldwyn-Mayer Studios Inc., Paramount Pictures, Sony Pictures Entertainment, Universal Pictures and Warner Bros. Studios.

The acquisition of Movielink, which has VOD and EST license agreements with the five founding studios, as well as more than 30 other studios, television-content distributors, and foreign and independent content providers, enables Blockbuster to offer consumers downloadable entertainment content via their PCs, portable devices, television-connected home networks and approved set-top boxes.

"Blockbuster is committed to keeping pace with the changing needs of customers by offering them an expanding array of convenient ways to access entertainment content," said Jim Keyes, Blockbuster Chairman and CEO. "Our acquisition of Movielink, with its associated digital content, is the next logical step in our planned transformation of Blockbuster. Now, in addition to the entertainment content we provide through our stores and by mail, we have taken an important step toward being able to make movie downloading conveniently available to computers, portable devices and ultimately to the television at home."

"The studios' goal with the Movielink service has always been to make digital entertainment content more conveniently, more widely and more securely available to consumers. This acquisition should further that goal," said Jim Ramo, CEO of Movielink from its inception. "With Blockbuster's ability to leverage its store network, online assets, and marketing expertise, Blockbuster should be able to grow the market for digitally-delivered entertainment content, and we believe that's good news for consumers and content providers alike."

Blockbuster plans to continue to operate the Movielink service and to eventually make elements of the service available through blockbuster.com.

"Thanks to the vision of the participating studios, Movielink has been at the forefront of the emerging digital media market," said Keyes. "We are grateful to the studios for entrusting us with their content, and we look forward to continuing to work with them to make even more digital content available to a growing consumer audience."

About Movielink LLC

Movielink (http://www.movielink.com/) is a leading movie download service, offering U.S. customers an extensive selection of new and classic hit movies, foreign films and other hard-to-find content. Movielink draws its content offerings from the vast libraries of Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, Warner Bros, Walt Disney Pictures, Miramax, Artisan and others on a non-exclusive basis.

About Blockbuster

Blockbuster Inc. is a leading global provider of in-home movie and game entertainment, with approximately 8,000 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed worldwide at http://blockbuster.com/.

Forward-Looking Statements

This press release includes forward-looking statements, including those related to our acquisition of Movielink and our expectations with respect to our entry into the digital delivery business. These forward-looking statements are based on management's current intent, belief, expectations, estimates and projections regarding our company and our industry. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict. Therefore, actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Factors that may cause actual results to vary materially include, among others: (1) consumer appeal of our existing and planned product and service offerings, including our new digital delivery offering, and the related impact of competitor pricing and product and service offerings; (2) overall industry performance and the accuracy of our estimates and judgments regarding trends impacting the home video industry; (3) our ability to obtain favorable terms from suppliers, including on such matters as copy depth and uses of product; (4) the studios' dependence on revenues generated from retail home video and their related determinations with respect to pricing and the timing of distribution of their product; (5) the variability in consumer appeal of the movie titles and games software released for rental and sale; (6) our ability to comply with operating and financial restrictions and covenants in our debt agreements and any adverse publicity relating thereto; (7) our ability to respond to changing consumer preferences, including with respect to new technologies and alternative methods of content delivery, and to effectively adjust our offerings if and as necessary; (8) the extent and timing of our continued investment of incremental operating expenses and capital expenditures to continue to develop and implement our initiatives and our corresponding ability to effectively control overall operating expenses and capital expenditures; (9) our ability to effectively and timely prioritize and implement our initiatives and to timely implement and maintain the necessary information technology systems and infrastructure to support our initiatives; (10) our ability to capitalize on anticipated industry consolidation; (11) the application and impact of future accounting policies or interpretations of existing accounting policies; (12) the impact of developments affecting our outstanding and any future litigation and claims against us; (13) a change in the composition of our key management and any shift in strategy in connection therewith; and (14) other factors, as described in our filings with the Securities and Exchange Commission, including the factors discussed under the heading "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2006 and under the heading "Disclosure Regarding Forward-Looking Information" in our quarterly report on Form 10-Q for the quarter ended April 1, 2007. This cautionary statement is provided pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release are made only as of the date hereof and we undertake no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future.

First Call Analyst:
FCMN Contact: jsieg@blockbuster.com

Source: Blockbuster Inc.

CONTACT: Media, Karen Raskopf, Senior Vice President,
karen.raskopf@blockbuster.com, or Randy Hargrove, Senior Director,
randy.hargrove@blockbuster.com, both of Blockbuster Corporate Communications,
+1-214-854-3190, or investors, Angelika Torres, Director, Investor Relations
of Blockbuster Inc., +1-214-854-4279

Web site: http://www.blockbuster.com/
http://www.movielink.com/

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Profile: International Entertainment