Dish Network Corp.'s winning bid for Blockbuster Inc. could put the satellite-TV provider on a path to compete with Netflix Inc., although significant hurdles remain.

Dish, based in Englewood, Colo., said Wednesday morning that it won a bankruptcy auction for the video-rental chain, offering $320.6 million for Blockbuster's assets. Dish plans to utilize the assets to enhance Dish's subscription offerings, leading some observers to predict it will start streaming video and shipping DVDs.

Any such move to imitate Netflix faces significant challenges, such as renewing deals with movie studios, securing streaming rights and building out the needed infrastructure.

Dish remains confident about the purchase. "With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities," said Tom Cullen, Dish's executive vice president of sales, marketing and programming in a news release.

"While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment," he said.