Up to 300 jobs at Tesco’s online entertainment service Blinkbox are under threat after the embattled parent company warned staff it was looking at all options, including a sale or closure.
New Tesco chief executive Dave Lewis is under pressure from investors to dispose of “non-core” businesses such as Blinkbox, which offers online film, TV and e-book purchases and music streaming.
Lewis, a non-executive director at BSkyB, reportedly views Blinkbox as a “distraction”.
Former Tesco boss Phil Clarke bought Blinkbox in 2011 to compete with Amazon as customers switched from DVDs and CDs to digital formats.
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Clarke hoped it would encourage shopper loyalty and last year launched the well-received Hudl tablet, partly to encourage users to consume Blinkbox content.
However, loss-making Blinkbox has faced intense competition from bigger rivals Apple, Amazon, NetFlix and Spotify.
Ian Maude of Enders Analysis added Blinkbox’s buy-to-own and rental model had fallen out of favour amid the rise of “all-you-can-eat” subscriptions.
“Blinkbox has been caught on the wrong side of that,” said Maude, who thought a “traditional media company” would be the most likely buyer.
Tesco declined to comment but insisted plans for the launch of Hudl 2 on Friday remain on track.Reuse content