New technology such as video-on-demand which is growing in use has badly impacted Blockbusters revenue. In addition DVDs are becoming increasingly cheaper courtesy store discounts. Of course there is the ever present menace of illegal online downloading of movies.

A report in the Wall Street Journal indicated that Viacom is holding discussions with a group of private equity firms including Thomas H Lee, Blackstone and Quadrangle. Viacom has an 82 per cent stake in Blockbuster.

Another report in Media Guardian informs that the first Blockbuster store opened in Texas in 1985. It grew rapidly and has 8,500 outlets with 48 million members. Last year it began offering DVDs for sale alongside its rental business. It is facing tough competition from discount retailers such as Wal-Mart. If the deal goes through it could be valued at nearly $2.5 billion