New York - Video rental giant Blockbuster (NYSE: BBI) is in negotiations toward taking a stake in the new pay-TV movie channel joint venture announced by Viacom (NYSE: VIA) and several movie studios last week, people familiar with the situation told The Wall Street Journal. Under the prospective deal, Blockbuster -- which used to be owned by Viacom -- would invest in the joint venture and in return get digital rights to the new channel's programming.

Scheduled to launch in the fall of 2009, the Viacom-led cable channel would compete with HBO and Showtime, offering movies and TV shows from Viacom-owned Paramount Pictures, MGM, Lionsgate and others.

Last year, Blockbuster acquired movie download service Movielink, and the company recently bid over $1 billion for electronics retail chain Circuit City.

Related Links:
http://online.wsj.com/article/SB120943876851351887.html

http://snipurl.com/26ck7 (DMW previous coverage)

http://www.blockbuster.com