The video rental chain has been holding such talks for several weeks, the sources told the Journal.
NEW YORK (Reuters) - Blockbuster Inc <BBI.N> is in talks about taking a stake in the new premium TV channel to be launched by Viacom Inc <VIAb.N> with Lions Gate Entertainment <LGF.N> and Metro-Goldwyn-Mayer, the Wall Street Journal said on Tuesday, citing people familiar with the situation.
The video rental chain has been holding such talks for several weeks, the sources told the Journal.
As part of an agreement being discussed, Blockbuster will get digital rights to the channel's programming in return for an investment in the partnership, the report said, citing those sources.
The new TV channel venture led by Viacom is seen as a challenge to CBS, which controls the Showtime Networks Inc premium movie and TV cable channels.
!ADVERTISEMENT!Blockbuster recently offered up to $1.3 billion to buy electronics retailer Circuit City Stores Inc <CC.N>.
Viacom, MGM and Blockbuster representatives were not immediately available for comment.
A Lions Gate spokesman declined to comment.
(Reporting by Aarthi Sivaraman; editing by Rory Channing)
