When Blockbuster bought Movielink in August for $6.6 million, we commented that the seven-figure sale price had to be a disappointment for the five movie studios that had launched it, given that their expenditures were in the nine-figure range and they had originally wanted in the neighborhood of $50 million. Thanks to a recent 8-K filing from Blockbuster, we know know exactly how painful that $6.6 million sale price was. During Movielink's five-year run, the studios dropped just over $148 million on the download service.

In fact, Movielink has been a big money loser throughout its entire existence. During the first half of 2007, the company lost $10.2 million on revenues of $1.9 million. That's a slight improvement over the same period in 2006, when losses were $11.6 million on revenues of $1.9 million. Looking back to 2005, the movie download service lost almost $31.2 million on revenues of $3.2 million for the whole year.

The company's financial woes come as little surprise given the stumbles made by MGM, Paramount, Sony, Universal, and Warner Brothers—the studios that launched Movielink—since its launch. When the service first launched in 2002, we noted its limited selection (200 movies), insane restrictions (a 24-hour window to watch movies once started), and technological lock-in (Windows and Internet Explorer only).

Unfortunately, little changed over the next few years. The DRM restrictions became slightly less draconian, but for years, subscribers were required to watch their rentals on a PC due to the lack of a DVD-burning option. In 2006, Movielink announced a download-and-burn service, but even that has taken a long time to arrive.

In the meantime, Netflix managed to get its own streaming service up and running early this year, while Amazon made its Unbox download service available to TiVo owners. Those moves put more pressure on Blockbuster to make a play for some online video action, culminating in its purchase of Movielink.

Blockbuster has some big plans for the unpopular service. The video rental chain wants to use Movielink as a distribution platform for all kinds of content, including that targeted at mobile devices. But with Blockbuster's independent auditor PricewaterhouseCoopers saying that Movielink's track record raises "substantial doubt about the Company's ability to continue as a going concern," Blockbuster's plans for the service may never come to fruition, especially if it has to keep pumping the kind of money into the venture as the studios did.