David Farnor | On 01, Dec 2014

Vodafone is close to buying blinkbox from Tesco, according to sources close to the deal.

Tesco purchased an 80 per cent stake in the pay-per-view VOD site back in 2011, with the intention of boosting its digital media arm. Since then, though, the supermarket has suffered heavy losses and was recently investigated by the FCA for exaggerating its quarterly profits by more than £250 million.

blinkbox has been one of the causes of Tesco’s losses, with the subsidiary costing the company £18.5 million, according to their latest report. Nonetheless, while the site struggles to compete with Sky, iTunes and now Amazon Instant Video, it has shown no signs of slowing down, launching a new advertising campaign, signing a deal with Channel 4 for several TV shows and, just last week, penning an agreement with EFD for their titles too.

With such infrastructure and paperwork already in place, blinkbox always seemed more likely to be sold off than shut down. Indeed, Vodafone was pegged as the frontrunner in the race to buy it by Paddy Power, following the announcement that Tesco were looking for a new owner. Now, unnamed sources have told The Telegraph that the supermarket is in “detailed talks” with the mobile phone operator, although is it “not expected to pay a large sum” for it.

The news comes as Vodafone plans its own pay-TV service, to be launched next year. The communications firm will be aiming to provide TV and broadband in a package deal not unlike its rivals BT, Virgin and Sky. Earlier this year, Vodafone added NOW to its 4G subscription plans, with some speculating that the company’s friendly relationship with Sky would see it resell the subscription VOD service through its platform.

With EE also unveiling its own TV service – with the unique premise of allowing viewers to stream content to multiple mobile devices in a home simultaneously – Vodafone will certainly need to do something to stand out. The acquisition of blinkbox could well be the answer.

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