Tesco's Blinkbox streaming service could end up in the hands of Vodafone, free to customers?

Vodafone is allegedly in talks to buy Blinkbox, Tesco's movie and music streaming service. It has been thought that the UK supermarket chain has been looking to offload the online company for a while, but it has emerged that Vodafone seems to be the only interested party.

A source "close to the talks" told the Telegraph that an agreement between the two is close and that the sum involved in the sale is not believed to be large. Blinkbox reported a loss of £18.5 million in its most recent annual accounts, so Tesco would be keen to remove that annual deficit from its own books.

Blinkbox offers digital movies and TV shows for rental and purchase (to store in a digital locker). It doesn't have a subscription option like Netflix or Amazon Prime Instant Video. There is also a Blinkbox Music service but it is not clear if that is part of the acquisition discussions.

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Vodafone has already announced that it is entering the paid TV and broadband business in order to join the rise in packaging multiple services for subscribers. Virgin Media and other rivals offer mobile, broadband and TV services in attractive bundles, and EE has recently launched its EE TV connected set-top-box in a push to do the same.

An acquisition of Blinkbox will also allow it to offer a content package, perhaps exclusively.