Big data for big bucks?

Tesco sells Blinkbox to TalkTalk and may offload Dunnhumby

The British supermarket giant Tesco is, to put it mildly, having financial difficulties. On Thursday it unveiled a range of measures that it hopes will help dig it out of its hole. These include the sale of Tesco Broadband and the associated Blinkbox media service to TalkTalk, and the potential sale of Tesco’s Dunnhumby big data outfit to … someone.

The sale of [company]Tesco[/company] Broadband, with its 75,000 broadband and 20,000 telephony customers, is fairly inconsequential. That of Blinkbox marks the end of a strategy that began in 2011, when Tesco bought a majority stake in the streaming service.

Observers have noted that Tesco failed to differentiate Blinkbox’s video-on-demand service from rivals such as Amazon and iTunes, then failed to pick up on the trend for video subscription models. TalkTalk, one of the U.K.’s largest ISPs, said on Thursday that it will integrate the service with its TalkTalk TV platform, and that the purchase will “help accelerate the development of our platform by delivering a number of key initiatives significantly faster, such as offering a TV app to customers for in and out of home access to paid-for content across a range of devices.”

Blinkbox’s video, ebook and music services (the latter of which was an attempt at the subscription model) collectively lost Tesco almost £25 million ($38 million) in 2013. The sale price wasn’t formally announced, but it was reportedly £5 million.

The potential Dunnhumby sale — Tesco has said only that it will “explore strategic options” for the division – is an interesting one. Dunnhumby is the “customer science” operation that manages Tesco’s very successful Clubcard loyalty card scheme, and these days it provides services to a range of clients including [company]Coca-Cola[/company], [company]Johnson & Johnson[/company], [company]General Mills[/company], [company]GlaxoSmithKline[/company] and [company]Macy’s[/company].

All in all, Dunnhumby now has “valuable insights” on the spending habits of around 770 million people around the world – a fact that raises interesting data protection questions in the event of a sale. It employs 3,000 people, and Dunnhumby acquisitions in recent years have included analytics outfit KSS Retail, social marketing firm BzzAgent and ad-tech company Sociomantic.

The current rumor is that rival outfit WPP is set to make a £2 billion bid for Dunnhumby. Given Tesco’s current difficulties, it’s easy to see how such an amount would come in handy.

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