With 'Movie Pass', Dish Ensures Blockbuster's Irrelevance

Oh, Dish Network. You were so close to turning Blockbuster from a overlooked clump of hair in the drain to a new and exciting brand. But with Blockbuster Movie Pass, you blew it.

For weeks, rumors swirled that Blockbuster was going to launch a streaming video service to rival Netflix, and the timing couldn't have been better. Netflix had just announced that it was breaking off its DVD rental service into a subsidiary called Qwikster, with a separate website, separate billing, separate queues and separate reviews. This news came shortly after Netflix raised prices by 60 percent for existing users who wanted streaming movies and mail-order DVD rentals. Consumers were livid and dumbfounded by Netflix's sudden changes.

(MORE: Netflix Backlash Rages On in Response to 'Qwikster')

At that point, Dish could have launched a service comparable to what Netflix used to be--streaming and DVDs in a single package for $10 per month, or maybe even a little more--and it would've been a hit. People were ready to make the switch.

But instead of attacking Netflix directly, Dish introduced a Blockbuster-branded add-on for its satellite TV customers. For $10 per month, they get streaming movies on their computers, plus one DVD rental at a time from Blockbuster by mail or in stores. There's no smartphone or tablet access (not yet, at least), and no streaming to game consoles or other set-top boxes.

Whoop-de-doo.

Dish says that it'll eventually get around to offering a streaming service that isn't tied to a satellite TV subscription, but the company will probably screw that up as well. After all, if a streaming service looks attractive enough, it's a potential threat to Dish's existing business model. Meanwhile, the opportunity to feed off Netflix's squandered good will is slipping away.

I'm reminded of when Blockbuster tried to "rescue" angry Netflix customers in July with a special offer of $10 per month for one DVD rental at a time and $15 per month for two DVD rentals. Sentiment aside, that deal was in many cases more expensive than Netflix and didn't include any options for streaming video. This week, Dish claimed to offer a "stream come true" for ex-Netflix subscribers, but in reality is selling nothing of the sort.

This could have been the start of a great comeback for Blockbuster. Instead, it's another missed opportunity.