When Dish Network acquired Blockbuster back in April, many assumed that the acquisition was a way for the digital satellite provider to cut into the mail order rental and video streaming market currently dominated by Netflix. However, even the most optimistic financial analysts didn’t think Dish and a newly managed Blockbuster would be able to loosen Netflix’s vice-like chokehold on the business – but a lot can change in just a few short months.
Netflix, who’s become its own worst enemy this summer, is dropping customers at an alarming rate. First came rate increases, which saw some plans going up by over 60% per month, then there was the ill-advised and absolutely boneheaded (and pointless – let’s not forget that…) decision to break Netflix into two separate services: Netflix, for all your streaming needs, and Qwikster for renting physical copies of movies and having them delivered right to your door. The company that could once do no wrong suddenly can’t get anything right…
Dish is keenly aware of Netflix’s recent struggles and is now poised to strike when the Goliath-like competition is at its weakest. They’ve made their first move, unveiling their plans for Blockbuster – and it seems safe to say that Netflix’s recent fumblings may give new life to their nearly dead foe.
Subscribers to the Dish Network service will be able bundle Blockbuster’s Movie Pass with their satellite subscription for $10 a month extra – or the same price customers used to pay for Netflix’s basic streaming and rental package. For that price, customers will be able to choose from roughly 4,000 streaming titles as well as rent physical copies of films and video games that will be sent to their home.
This new deal is sure to be appealing to anyone who felt stung by Netflix’s sharp price increases – but getting the sweet deal requires that one be a Dish Network subscriber. The company has hinted that it hopes to make the service available to everyone at some point, but has no stated timeline for making that happen.
Dish is able to offer subscribers the old Netflix rate primarily because they’ve bundled the service with their regular satellite subscription. Unlike Netflix, who derives all its revenue through rentals and streaming, Dish has a surefire way to help defray the high cost of acquiring streaming rights from the studios. It’s basically a win-win situation for the company – streaming is paid for partially by the regular satellite service fee, and if Blockbuster Movie Pass resonates with viewers after Netflix’s recent troubles, the “only for Dish subscribers” angle seems likely to convince some folks to jump over to the satellite provider. More money from subscribers means more money to spend upgrading the service.
The catch here is having to subscribe to Dish Network. While we love the idea of being able to rent and stream movies at the old Netflix price, we’re not willing to ditch DirecTV for the privilege of using the service. What do you think? Will you consider joining Dish Network for access to this service or are you content to sit back and wait to see how the whole Netflix drama unfolds before making a decision? We’re voting for the latter.
[via Seeking Alpha]