Dish Network plans to introduce a Blockbuster subscription streaming-movie service next month to compete with Netflix, according to a person with direct knowledge of the plans.
Dish acquired almost all of Blockbuster's assets out of bankruptcy in April for $320 million in a deal that analysts said was partly motivated by Blockbuster's existing streaming system. Blockbuster.com already offers on-demand movies for one-time purchase, but this would be its first subscription-based streaming service. Netflix, based in Los Gatos, California, has 24.6 million U.S. customers and a library of 20,000 movies and TV shows available online.
The timing is designed to coincide with price increases being implemented by Netflix, according to the person, who declined to be named because Dish's new offering isn't public.
Netflix is now charging separate fees for mail-order DVDs and streaming videos, raising the price for customers who want both by 60%, to $15.98 per month. Dish hasn't set a price for its rival service, the person said.
The new service may also include on-demand Blockbuster movies that Dish satellite customers can watch on TV sets, the person said. Blockbuster may offer the streaming service in conjunction with its mail-order and in-store DVD rentals.
The new offering is also expected to include movies from Starz, which said Thursday that it had halted negotiations with Netflix to renew their deal for next year. Netflix offered Stars more than $300 million per year to extend their relationship, but Starz wanted Netflix to charge subscribers an extra monthly fee for content from Starz "and other premium providers," the Los Angeles Times reported.
Netflix said new competitors should be expected. "Netflix leads a big, growing market and big, growing markets always attract competition," spokesman Steve Swasey said today in an emailed statement.
A Dish spokesman declined to comment.
-- Bloomberg News --