Blockbuster Movie Pass no Netflix killer

commentary Talk about a serious letdown.

Anticipation was high that Dish Network would unveil a streaming video service through Blockbuster that would compete--and even possibly undercut--Netflix, which isn't exactly feeling the love right now. Instead, Dish announces a bundle of streaming videos; DVDs and games by mail; and access to premium movie channels--but only to Dish customers.

So those of you looking to leave Netflix in righteous anger over the way the company has treated you in the recent months might want to pause for a moment, because Blockbuster Movie Pass is no viable alternative. In hindsight, we probably shouldn't have expected too much. I mean, can we really rely on Dish, a company that depends on consumers paying a regular monthly fee for cable channels, to provide an answer to the growing horde of cord cutters?

"More Americans are demanding an easier way to view their video," Dish CEO Joe Clayton said during the company's presentation today.

Clayton is correct, but Blockbuster Movie Pass isn't the answer.

Essentially, it's a souped up Dish package. While I don't debate it's an attractive one, I doubt Dish's press conference would have garnered the media and consumer interest that it did had people known in advance what it was. We were looking for something radically different from Dish, but we got an incremental new service plan instead.

The package, which costs $10 a month for existing Dish subscribers or is free for a year to new Dish subscribers paying $39.99 a month or more, will be a boon to the 14 million existing customers and may attract some new consumers. But it's cold comfort for the vast majority of Americans who aren't Dish customers. That's particularly the case for consumers in major metropolitan areas such as New York, where satellite service isn't a legitimate option.

A Dish executive said during the conference that consumers still prefer to pay for this kind of service as an add-on to traditional pay-TV service. That kind of thinking misses out on the growing market of consumers who no longer feel that way--a segment that has been largely responsible for Netflix's explosion in popularity. Netflix, in comparison, has 25.6 million customers, but expects to lose nearly 2 million customers in the third quarter.

That Netflix is in the most vulnerable position it's been in for years makes this even more of a missed opportunity for Blockbuster and Dish. Dish has been taking advantage of Netflix's tarnished reputation, and said during the conference that it had signed up 500,000 Blockbuster subscriptions over the past 30 days. But it could have pressed the advantage even harder if it launched a legitimate competitor. The service also could have greatly expanded its potential customer base--something Dish badly needs.

The disappointment was apparent in some of the questions and the chatter during the presentation. More than one question involved Dish's plans to launch a service for non-Dish customers.

Dish executives hinted at a Blockbuster streaming service available to everyone. They said such a service was still in the works, and that they would save the details for a later event.

I'm not holding my breath.