DISH is planning to launch its first streaming movie service aimed at Netflix via its $320 million Blockbuster acquisition in April. It comes on the heels of the Netflix price increase, which was implemented this month. Starting this month, Netflix said it will charge separate fees for mail-order and streaming videos, raising the price by 60% to $15.98 for customers who want both options.
The new service may include on-demand Blockbuster movies that Dish satellite customers can watch their TVs sets. Blockbuster may also offer the streaming service in conjunction with its mail-order and in-store DVD rentals. A Bloomberg article says DISH’s offering is expected to include movies from Starz, which will not renew its agreement with Netflix after 2/28/12.
While Blockbuster.com offers on-demand movies for one-time purchase, this would be its first subscription-based streaming service. The new option would complement Blockbuster On Demand, which allows users to watch content on PCs, mobile devices and DVRs.
Noted Marci Ryvicker, Wells Fargo Senior Analyst: “We are not surprised with DISH’s foray into the SVOD business post its acquisition of Blockbuster. Though it appears that this will initially be a movies-only service we would anticipate expansion into other content at some point down the line, as we have seen content providers negotiate with many Netflix competitors such as Amazon, hulu and Walmart (vudu.com). Bottom line: We view DISH’s entry into the SVOD business as an incremental revenue stream that is likely to become significant over time. Plus, it is a great retention/acquisition tool for DISH Network subscribers. We reiterate our Outperform rating on the shares.”