Dish unveils Blockbuster Movie Pass media bundle

Dish Network unveiled today the "Blockbuster Movie Pass," a bundle of services that includes streaming video; DVDs; Blu-Rays and games by mail; and access to premium movie channels. The catch: you need to be a Dish Network customer.

The service will launch October 1. Existing Dish subscribers can sign up for the package for an additional $10 a month. New customers who sign up for Dish's America's Top 200 package for $39.99 a month get access to the service for a year.

"More Americans are demanding an easier way to view their video," said Dish CEO Joe Clayton. "There is an easier way to have it."

The service could potentially breathe new life into Blockbuster, as well as drive subscriber growth for parent Dish. Dish subscribers, meanwhile, could be convinced to switch away from rival streaming service Netflix.

The timing couldn't be better, with Netflix dealing with the fallout from a price increase in its DVD-and-streaming plan and now scrambling to explain why it is splitting its DVD and streaming services into separate businesses. Over the past few months, the company has taken a beating from both consumers and investors. The backlash resulted in Chief Executive Reed Hastings issuing an apology.

Blockbuster has made steady progress since sliding into bankruptcy a year ago. The company, which still relies on brick-and-mortar stores to rent out its DVDs, was saddled with too many physical locations when the industry was moving to DVD-by-mail and streaming service. Sure, it offers DVDs by mail and a limited streaming service, but the customer base pales in comparison to that of Netflix. Satellite-TV provider Dish Network scooped up the company for $228 million, considered to be a bit of a head-scratching move at the time by Dish founder Charles Ergen.

Dish, however, was quick to revitalize Blockbuster, expressing confidence in the business and insisting that it would keep 1,500 of its stores running. Dish could also use the physical locations as another outlet to sell its core satellite-TV service. After Netflix raised its prices in July, Dish sent notices to media outlets "reminding" them about Blockbuster's low prices and digital download service.

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• Who stole Netflix's mojo?

Previously, Blockbuster On Demand was the company's streaming service. But instead of a flat-rate pricing model, customers paid for each title. Blockbuster would argue that customers would get access to newer movies, including ones that came out the same day as they hit DVD and Blu-Ray. Its TV offering, however, was sparse, and at $3.99, the rental costs would add up quickly.

And the physical locations, while useful as a distribution outlet for Dish, are still costly to run and increasingly irrelevant in the age of digital video over the Internet. One of Netflix's keys to growth has been its ability to get on multiple devices, including the video game systems, televisions, Blu-Ray players, and Mac and PC Internet browsers. Blockbuster lacks that kind of broad reach.

And while Netflix is taking its shots now, it is by no means dead. The company said it expects 24 million subscribers overall for the third quarter, down from previous expectations, but still a strong base of customers other media services would climb over themselves to get.