With the launch of Blockbuster Movie Pass, Dish Network (NASDAQ:DISH) is sending a signal that it’s ready to take on Netflix and others in the streaming industry. A streaming and DVD rental service for movies, TV shows and games, Blockbuster Movie Pass is priced at $10 and is currently available only to Dish’s existing customers. However, it’s too early to say whether Blockbuster will be able to lead the streaming space that is presently dominated by Netflix (NASDAQ:NFLX). Netflix’s decision to hike prices and split its DVD-by mail business wasn’t well received by customers, and this will create a dent in its subscriber count for Q3 — an advantage for Dish. Meanwhile, Dish is also looking at acquiring Hulu in order to consolidate its streaming offering and compete better against Amazon (NASDAQ:AMZN) and Netflix. (See Dish Bids For Hulu: What Are They Up To?)
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Dish Launches Blockbuster Movie Pass
Dish unveiled its movie streaming and DVD/game rental service on October 1. The service is priced at $10 and for now is available only to Dish’s existing customers. In addition to online streaming and DVD by-mail service, Blockbuster Movie Pass lets you exchange unlimited numbers of DVDs and games at local participating Blockbuster retail stores.
According to Blockbuster President Michael Kelly, the company has gained over 500,000 new subscribers and traffic at Blockbuster stores is up over 100% last month.  Since this is bundled service, Dish could gain few of Netflix’s disgruntled customers that are dissatisfied with the split of Netflix’s streaming and DVD-by-mail service.
Blockbuster Movie Pass vs. Netflix
Not even a month old, it’s too early to say how Blockbuster will stack up against Netflix. Blockbuster’s pricing is similar to what Netflix’s pricing was before the price hike, and is $6 less than Netflix’s current $16 price tag for its streaming+DVD package. However, in terms of movies and TV titles for online streaming, Netflix boasts a wider selection of 20,000 titles compared to Dish’s 3,000 titles for streaming to TVs and 4,000 titles for PCs.  Blockbuster also provides game rentals which Netflix presently doesn’t offer, though it plans to with the Qwikster spin-off.
Blockbuster Movie Pass is currently offered only to Dish subscribers, but as the company opens its service to non-Dish subscribers, that’s when Netflix will start feeling the real pressure. The streaming industry is set up for an interesting show and the audience can see who emerges as victor in the coming months.
While we estimate Blockbuster & equipment sales revenue will increase from $900 million in 2012 to $1.2 billion by the end our Trefis forecast period, Trefis members expect an increase from $0.9 billion to $1.3 billion during the same period.
We currently have a Trefis price estimate of $29.32 for Dish Network’s stock, about 20% above the current market price.Notes:
- DISH, Blockbuster Announce $10/Month Alternative to Netflix, PCWorld, Sept 23, 2011 [↩]
- Why the Dish/Blockbuster Streaming Service Won’t Wound Netflix, allthingssd, Sept 23, 2011 [↩]