‘It’s a hugely exciting time’, Blinkbox founder Michael Cornish said when it was announced that Tesco had bought an 80% stake in his business in 2011. ‘This partnership represents another step forward, bringing the leading movie streaming service together with the UK's biggest retailer.’
Cornish, now Tesco’s digital officer, couldn’t have known at the time that, in less than four years, the promising business he created would become just a small casualty in Tesco’s battle to turn around.
Yesterday it emerged that Blinkbox Books, an ebook download service and the last remaining part of the business under Tesco’s control, would be shut down – putting the jobs of 60 people at risk. As TalkTalk and Guvera, respective buyers of the video and music divisions of the business, will be ditching the Blinkbox brand, Cornish’s creation will be all but killed off. The value of the sales was undisclosed, but are not thought to have been more than a combined £10m.
'We’ve learnt a lot since launching the service [Blinkbox Books] and whilst we saw encouraging levels of take up, we believe that we can do more for our customers by focusing on our core business,' a Tesco spokesperson said. 'The service will close by the end of February.'
Blinkbox is unlikely to be the last Tesco acquisition unceremoniously booted into the long grass. Yesterday it emerged that the struggling supermarket was beefing up its corporate finance team, presumably ahead of a stream of asset sell-offs. Dunnhumby, which operates Tesco Clubcard, is a likely candidate. As are Tesco Bank and the supermarket’s Asian subsidiaries.
Equally interesting is the decision by Waterstones not to buy Blinkbox Books. It was reported earlier this month that the high street chain was in exclusive acquisition talks with Tesco, as it looked to boost its involvement in the ebook market.
'Blinkbox is a modern platform that delivers books through an app, so that you can read them on any device that you wish to, excluding of course a Kindle, which is a closed system,' Waterstones chief exec James Daunt said at the time, suggesting the chain could be headed for a clash with Kindle maker Amazon.
To be fair to Tesco, latest accounts show that in the year Blinkbox books posted a pre-tax loss of £2m on just £70,000 in sales in the year to September 2013. It was a good candidate for closure as the supermarket aims to strengthen its balance sheets. What’s next for the chopping block?