Irony was on full display at the Dish Network press conference announcing the new Blockbuster Movie Pass, as the very first benefit CEO Joe Clayton pointed to was access to 100K+ DVDs by mail (with no extra charge for Blu-ray). That's right - despite Netflix's willingness to practically blow up the company in its belief that "streaming is the future," good old Blockbuster is returning to its roots, emphasizing physical media's primacy, at least for now. That Blockbuster was outgunned by Netflix's own superior DVD-by-mail service years ago just adds to the sense that "all that's old is new again."
What Dish recognizes that Netflix incongruously does not is that DVDs offer the most comprehensive entertainment choice to consumers, and will for a long time to come. Yes, streaming is the future, but the thicket of studio and network rights and windowing approaches guarantees streaming will remain a hodgepodge for years.
In fact, by emphasizing DVDs, Dish is taking a page from Netflix's playbook of 2 1/2 years ago - positioning streaming more as a bonus than as the core. And with 1,500 stores to augment DVD exchanges, Blockbuster offers something Netflix never could (whoever thought the stores' value could rise again?). As I've repeatedly argued, Netflix's key benefit was the combination of DVDs' CHOICE and streaming's CONVENIENCE. By cutting DVDs loose, Netflix opened up a big flank for Blockbuster, and others, to attack.
If there's any good news for Netflix and other competitors, Dish chose a cautious first step for Blockbuster Movie Pass, providing access to it only for Dish subscribers as a $10/mo add-on. Despite a high-profile ad campaign that will kick off on Oct. 1, it's only relevant for Dish subscribers or pay-TV users looking to make a switch. But this is clearly a temporary move, as Dish/Blockbuster executives repeatedly hinted at a standalone DVD/streaming service coming soon. And certainly on Oct 1 any Dish subscriber who's also a Netflix subscriber will be interested in giving Blockbuster Movie Pass a close look.
One other bit of good news for competitors is that although references were made to thousands of streaming movies and TV shows in the new service, it's not clear exactly what those titles are, or how they might compete with Netflix, Amazon, Vudu and others. Quality matters no matter what the price is, if it's not there, it will be noticed. Also not available yet is streaming to any mobile or connected device.
Blockbuster Movie Pass is clearly just a first salvo by Dish. For now, it's not a "Netflix killer" as some predicted it might be. But it will be another credible entrant (Blockbuster noted it signed up 500K new subscribers in just the past month, in the wake of the Netflix price change), with lots of potential. For Dish it also signals how over-the-top services like Blockbuster Movie Pass are blurring the lines with TV Everywhere efforts and traditional VOD offerings, which will certainly cause even more confusion for consumers trying to make their optimal choices.
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