All Things Digital

Yesterday, a source told me that Flixster, the fast-growing social network for movie lovers, was back in talks to be bought by Barry Diller’s InterActiveCorp.

Those IAC-Flixster rumors flew about a month ago and were entirely true.

But no deal, it seems. IAC has apparently found the price too high, according to other sources. But, said these sources, others are still in the game.

So if an acquisition deal does happen, two intelligent guesses to the possible winner for the company with 39.5 million user home pages, more than 1 billion user-generated movie ratings and a sassy motto of “Stop Watching Bad Movies”?

Blockbuster or News Corp.

(Sources said Viacom’s MTV unit gave Flixster a look too, but also thought the price too high.)

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Sure, they can copy all they want from online video-rental upstart Netflix, but the purchase of video-download service Movielink by video-rental retail giant Blockbuster feels to me like a sad, little move, signifying nothing.

Getting a reported price of under $20 million, according to a report in The Wall Street Journal, will hardly cover costs of upward of $100 million–even “Ishtar” didn’t do that badly.

The compromised Movielink, the bastard child created five years ago by movie studios (Paramount Pictures, Metro-Goldwyn-Mayer Studios, Universal Studios, Sony Pictures Entertainment and Warner Bros.) with too-onerous digital rights management claws, lackluster marketing and high prices, has been widely mocked even by execs at the studios themselves.

When I recently brought it up during a visit to one studio, in fact, an executive there did a most excellent rolling of his eyes that needed no further explanation.

But now it is Blockbuster’s problem to correct, which is mainly how to battle online rivals like Netflix and others chipping away at its business either via mail-order rentals or video-on-demand services.