WSJ: Blockbuster May Acquire Movelink

Blockbuster is said to be talking to movie download service Movielink over a possible acquisition, The Wall Street Journal reported on Thursday.

If the transaction goes through, it will carry benefits for both companies. Blockbuster will gain a leg up on larger competitor Netflix, who it has been locked in a tight battle with in the online movie rental business.

For Movlielink, an acquisition would help it to better compete in what is increasingly becoming a more-crowded and competitive marketplace. Even though it has been around for nearly five years, the market for online downloads did not kick into high gear until iTunes began offering movie downloads.

The WSJ says that a deal would be worth about $50 million in cash and stock. Talks are said to be in "advanced" stages, likely spearheaded by CEO John Antioco.

He has said previously that the company very much wanted to offer a download option as part of a "triple play" of service offerings. Antioco is also under pressure from investors like Carl Icahn, who has pressured the company in the past to begin showing results.

Both companies have attempted to merge once before, in 2005, however talks fell through. Movielink is jointly owned by five major studios, including Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios.