Tesco puts Blinkbox up for sale, according to reports

Music and video streaming service to be offloaded in Tesco's clearance sale

Tesco is planning to sell or close its Blinkbox on-demand video and music service.

It comes as the company continues to wrestle with falling sales and the fall-out from its grandiose expansion under former CEO Terry Leahy, which his successor Philip Clarke struggled to get to grips with.

According to a report in The Times, Tesco's new CEO, Dave Lewis, informed Blinkbox's management of the board's decision last week, although the company remains publicly tight-lipped about its plans for the company, which it picked up in 2011 for an undisclosed sum.

The Blinkbox acquisition formed part of a strategy to take on Amazon and other companies in the so-called "battle for the living room".

However, as a video-on-demand service, offering films and television on a rent or buy basis, it has struggled to compete with both Netflix and Amazon's own LoveFilm service. On the music side, meanwhile, the business remains virtually invisible alongside more popular alternatives, such as Spotify and iTunes.

According to The Times, Blinkbox will be closed down 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.

The reports follow Tesco's decision to shut Clubcard TV, a free video-streaming service Blinkbox provides to Clubcard holders, because it had failed to attract enough users, according to the company.

"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," explained Tesco on the support page of the Clubcard TV website.

Clubcard TV will close on 28 October, but the company is still planning to launch a follow up to its popular and well-received Hudl tablet computer - Hudl 2 - on Friday.