Peter Kafka

Recent Posts by Peter Kafka

Here Comes the Next Bump for Netflix: A Blockbuster/Dish Streaming Service

It’s been a bad few months for Netflix. Today might be another lousy day: Dish Network is holding a press conference at 1 pm ET, and the odds are very, very, very good the satellite TV company will use it to introduce a Netflix-style streaming service of its own.

You don’t have to be terribly perceptive to see this one coming.

For instance: The company’s invitations for today’s event (you can watch a livestream here) tease that Dish and Blockbuster will be offering a “stream come true.”

Meanwhile, everyone — including Netflix CEO Reed Hastings — assumed a new streaming service was the reason Dish paid $320 million to buy Blockbuster out of bankruptcy back in April.

And then there’s the fact that Dish itself has said, on the record, that it wants to launch a Netflix-streaming competitor.

So that mystery is just about solved. Real question: What will it mean for Netflix?

We’ll have to wait until we see crucial details about pricing and catalog. [UPDATE: Here we go. Verdict: A not-bad but not-exciting service that’s only available to Dish customers, for now. Most definitely not a Netflix-killer.]

The obvious play would be to offer more titles for the same $8 a month that Netflix charges, or less. But that isn’t a given.

For one thing, while lots of folks like to gripe about the relatively limited selection that the Netflix streaming service offers to its customers, it’s still a whole lot more extensive than anything else out there.

Netflix has some 20,000 titles; Amazon, its next-biggest subscription rival, has a mere 9,000. It would be quite tough for Dish to acquire anything close to Netflix from the very start.

And the Hollywood studios that Dish is counting on to help it battle Netflix aren’t going to be that psyched about another $8 all-you-can-eat plan. They feel that kind of pricing undervalues their movies and discourages customers from buying or renting their films as one-offs.

Recall that many people believe the reason Netflix hasn’t been able to renew its Starz deal is because the cable network insisted that Netflix create a new, more expensive tier for its stuff.

If the Blockbuster service includes Starz movies, as Bloomberg reports, then it’s hard to imagine it working without a premium tier.

So we’ll see. The good news — if there is any — for Hastings and Netflix is that Dish/Blockbuster isn’t creeping up on anyone, so that should (theoretically) cushion any blow. We’ll come back this afternoon once we hear the full details.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik