When Dish Network bought Blockbuster out of bankruptcy protection last spring, it signaled its intent to compete with online streaming services such as Netflix. But what Dish rolled out today, a new streaming and DVD-by -mail service called Blockbuster Movie Pass, seems more designed to protect and grow its satellite TV service than to challenge Netflix directly in the near term.
For one thing, Blockbuster Movie Pass is currently only for Dish Network subscribers. Existing Dish customers can sign up to get the service for $10 a month; new Dish subscribers will get Blockbuster Movie Pass for free for a year.
Rivals also have better-stocked libraries for streaming. Blockbuster Movie Pass does include movies from Starz, which Netflix is set to lose in February due to a dispute over fees, but the overall the service offers access to 4,000 streaming titles in addition to 100,000 DVD titles and 3,000 games for the Xbox. Netflix has 20,000 movies and shows for streaming; Amazon has 100,000 titles available to stream on a pay-per-view basis.
Dish execs didn't rule out a service for non-Dish subscribers, but said they fundamentally believe that consumers aren't looking to online services as a replacement for cable or satellite TV.
"We think consumers are looking for better value for their entertainment dollar, especially in this economy," said CMO Ira Bahr at a press conference. "They are frustrated with multiple bills, multiple inputs and multiple log-ons." Dish Network CEO Joe Clayton said the brand will compete with the likes of "Amazon, Hulu, Redbox, Netflix and Quickster," and that the new service will be supported this fall by a major national ad campaign.
"We don't think consumers want to cord-cut," Dish president Michael Kelly said.
The rollout of the new Blockbuster offering comes days after Netflix CEO Reed Hastings apologized to consumers for not fully explaining a recent increase in prices and announced a plan to split the company's streaming service from its mail-order DVD business, which was renamed Quickster.
Mr. Clayton said the timing of the Blockbuster announcement was long-planned, so the Netflix moves were merely serendipitous. "No amount of planning can replace luck, so we'll take luck," he said.