During an interview in The Los Angeles Times this week, recently appointed DISH Network CEO/President Joe Clayton provided the first official confirmation of something we all pretty well knew was coming since the Blockbuster acquisition closed in April: DISH will be launching a Blockbuster subscription streaming service to compete directly with Netflix. No details were offering as to timing (or anything else) but he did say "Sooner is always better." Clayton also said "Everybody's enamored with Netflix. Who's to say we can't do the same thing?"
Can DISH "do the same thing" as Netflix?
Possibly. Clayton notes the combination of Dish and Blockbuster brings "access to the studios" and their "huge movie libraries." He's right. The DVD business may be dying but it's not dead, and Blockbuster is still providing considerable studio revenue via physical media sales and rental, which should give it some streaming deal leverage (for now). DISH's 14 million subscribers makes them the third biggest MVPD in the U.S. (after Comcast and DIRECTV) and this provides leverage with the studios from linear VOD and emerging net-based VOD to STBs. Plus DISH has bought $3 billion in broadband wireless spectrum it has yet to put into play.
DISH's move into subscription streaming and OTT is backed by founder and chairman Charlie Ergen. As the LA Times notes, Ergen said last November "The world is changing" and Dish has to "figure out how we can do things differently and how we can compete."
But DISH is choosing a formidable target in deciding to compete with Netflix. First, it's going after an incumbent with over 24 million U.S. subscribers (and rising). And while Netflix has gotten where it is by good strategy and timing, execution has been a vital part of its success as well. Its user interface, useful suggestion/discovery features, and high-quality multi-device streaming user experience are the product of much hard work on Netflix's part. This level of execution is not easy to duplicate.
Not only is Netflix today dominating the streaming subscription category; it's really the single standout success in the OTT services market so far. A viable market should be able to support more than one major player. The question is, who will commit the not insubstantial resources to jump in this space? And can DISH/Blockbuster or any other "want to be" subscription streamers (including Amazon, possibly Google, Hulu and maybe Apple) execute well enough to at least be a strong #2 to Netflix?
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