Netflix killed Blockbuster, but could end up a victim of its own success. With consumer anger at Netflix’s new pricing structure at a fever pitch, Blockbuster’s new owner sees an opportunity to bring the brand back. On Friday, Dish Network announced a new product, the Blockbuster Movie Pass, which combines the services offered by the two brands. The pass is a lot like what Netflix offered until this month — a combination of DVDs by mail and video streamed online — but adds in the satellite subscription service for which Dish Network is known, as well as games by mail. Dish calls it “the most comprehensive entertainment package ever.”
Dish bought the bankrupt Blockbuster back in April, but the timing seems right to unveil the new service. Netflix announced in July that it would discontinue its single package of DVDs by mail and streaming video, instead splitting them in two, forcing customers who want to keep both pay more — up to 60 percent more. Customer unrest had been rising since then, culminating in Netflix shares collapsing by 20 percent this month, after the new prices went into effect and the company realized it would have a million fewer customers because of it.
Netflix tried to save face. But it did so in a bizarre move that continued to leave critics wondering how executives of a company that’s transformed an industry could start doing business so badly. Netflix will spin off its DVD business into a separate subsidiary — with a new name and website. Qwikster will now be the company customers use to get DVDs by mail, while Netflix will be the one offering streaming video. Not many companies give up the moniker they’ve made a household name.
Netflix is keeping its eyes on the future, though. It also just announced a new application that will allow its customers to share on Facebook videos they’ve watched.
Right now, the Blockbuster Movie Pass will only be available to Dish subscribers. They’ll pay $10 a month for the extra services, and nothing if they’re new customers buying Dish Network’s $39.99-a-month package. But the company plans to offer the plan to non-satellite users eventually.
Netflix, with years of deal making, still has more streaming video to offer than any other company with 20,000 titles. But the new kids on the block are catching up. Dish can bring 5,000 streaming movies to televisions and 10,000 to computers. Amazon, which gives some of its streaming offerings free to Amazon Prime members, has about 9,000 videos available.
Netflix might be the first name in home entertainment. But recent events — and the company’s own misjudgments — mean it certainly won’t be the last.
Kelly Jane Torrance is The Washington Examiner movie critic. Her reviews appear weekly and she can be reached at [email protected].
