Netflix could hardly be having a worse week. It started with another flood of customer backlash from its decision to spin off and rename its DVD business, which came only weeks after it irked customers by raising its membership fees.
While the company expected to see its subscriber growth slow down temporarily, it didn’t quite expect the outrage it garnered and is now projected to lose 1 million customers from it.
Yesterday, CEO Reed Hastings took to the stage at Facebook’s f8 developer conference to deliver some watered-down news. As a list of music streaming services and other digital media companies excitedly announced their deep integrations with Facebook, Netflix said it too would be rolling out its own Facebook integration in several countries, but not in the United States. In other words, only a tiny percentage of the company’s customer base would get to enjoy the new social integration, thanks to an obscure, outdated law on the books in the United States that prevents them from sharing information about who watched what.
Today, a company nearly put to death by Netflix’s disruptive video service is planning on striking back. Blockbuster, which was acquired out of bankruptcy by the Dish Network, will likely announce that its launching a competing streaming service. We first started hearing word of Dish’s plans to launch a Netflix competitor several weeks ago and today’s event, conspicuously titled “A Stream Come True” would appear to be the place they’re going to announce it.
As vulnerable as Netflix may seem at the moment, it still has 24 million subscribers and a giant catalog of content available across various devices and by mail. In order to truly compete, Dish and Blockbuster would need to offer something of particularly unique value, be it a lower price point or a broader selection of content. Since Dish is a pay TV provider, it already has a catalog of content at its disposal.
If the new offering has a catalog as bigger (or bigger) than Netflix and offers it for less than the $8 Netflix charges, the company could be in trouble.
Update:The Dish Network confirmed in its press conference earlier today that the new service, called Blockbuster Movie Pass, will be launching on October 1 for Dish subscribers. Rather than a stand-alone Netflix competitor, the product appears to be an add-on for Dish satellite TV subscribers. It will have 4,000 movies available to stream to PC’s and 3,000 will be available on television sets, alongside the Dish Network’s existing offerings. There will also be a DVD-by-mail component to the service. It will cost $10 per month on top of existing Dish subscription fees.
