Tesco is reportedly planning to sell or close down its loss-making Blinkbox on demand video and music service.
A report in The Times says Tesco's new CEO Dave Lewis informed Blinkbox management of his decision last week, although Tesco itself has refused to confirm the report of a sale or closure. A spokesman told ComputerworldUK.com: "We would not comment on speculation".
The Times says Blinkbox will be shut if a buyer cannot be found. Any buyer of the service, which was acquired by Tesco in 2011, will struggle to compete against more established video on demand players like Netflix.
Prior to the Blinkbox speculation, Tesco did confirm at the end of August that it was shutting its free online video streaming service Clubcard TV - which is "powered by Blinkbox", according to its website. Offered to customers with Tesco Clubcard accounts, the service provided access to movies and television shows.
Tesco said the decision was made as Clubcard TV had failed to generate enough users, rather like Blinkbox.
"We’ve learnt a lot since launching Clubcard TV in March 2013 and whilst many enjoyed our free service, we weren’t getting the level of repeat usage we had hoped for," Tesco said on the service's support site.
But, it added, obviously unaware of the impending Times report: "You can still access entertainment through Blinkbox Movies which offers the latest blockbuster films and hit TV shows without subscription. You can rent or buy and watch instantly on loads of devices."
Clubcard TV will close on 28 October. Tesco is planning to launch its new Hudl 2 tablet on 3 October, but potential buyers will now be wondering where they can download films and music from, if required.