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Blockbuster to the Rescue!

4:00 PM -- It's not on par with Dish Network LLC (Nasdaq: DISH)'s old Don't Feed the Pig campaign against cable, but Charlie Ergen & Co. has put Netflix Inc. (Nasdaq: NFLX) squarely in its marketing crosshairs.

It didn't take long for Dish, Blockbuster Inc. 's new owner, to boot up a new customer-acquisition campaign targeted at Netflix subs who are upset and possibly ripe for churn after Netflix recently decided to split out its unlimited DVD and streaming plans and jack up pricing for subs who want both. (See Netflix Subs Revolt .)

How many subs are fleeing is anecdotal at this point -- USA Today's unscientific poll showed that nearly two thirds of 6,000 respondents said they'll be chucking their subscriptions as a result.

But who can blame Blockbuster, a company that got bloodied pretty good as it fought through bankruptcy, for trying to grab some low-hanging fruit?

In this case, Blockbuster's offering Netflix subs (they have to show proof) a free 30-day trial to its two Total Access plans before making them pay $9.99 per month for its one-disc plan and $14.99 for its two-disc option, with the added incentive of offering DVD titles 28 days before Netflix gets them, plus access to Xbox, Playstation 3 and Wii games. Dish's offer is good through mid-September.

I've been a Netflix sub for about four years, and I'm still on the fence here as I'm perturbed, but not really outraged, by the changes, which will jack up my subscription by about 30 percent. Granted, I don't watch many DVDs through the service, so I'm ignoring the Blockbuster offer. Plus, I'm a fan of Netflix's streaming service, already having hooked it up to a laptop, a Blu-ray player, a Wii, a PS3 and an iPad.

What say you, Netflix subscribers? Are these changes enough for you to jump ship, and what do you think of the Blockbuster offer?

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 4:59:12 PM
re: Blockbuster to the Rescue!

Ergen's probably keeping the pig claims in the pen for when Blockbuster actually tries to undercut Netflix's price.  Todd Spangler at Multichannel News points out  that Blockbuster's offer is the same or higher than Netflix's, depending on the tier. But are any of Blockbuster's bells and whistles (the quicker release, games) worth it? JB


 

Jeff Baumgartner 12/5/2012 | 4:59:11 PM
re: Blockbuster to the Rescue!

And if we're to believe that Netflix is really trying to steer people away from the DVD business due in large part to the higher distribution costs, it makes me also wonder if Blockbuster could be doing Netflix a favor in a strange way. JB


 

ravanelli 12/5/2012 | 4:59:11 PM
re: Blockbuster to the Rescue!

I'm on the $9.99 Netflix plan and got the same email about the price increase.  It's annoying, but not yet a deal-breaker to pay the new $16 rate.  I find myself using DVDs for new or rare stuff, and streaming for short-notice stuff.  I do believe that this is just the start though, and once it get's to the $20 barrier I'm out.

thepriebe 12/5/2012 | 4:59:10 PM
re: Blockbuster to the Rescue!

I think you're on to something with your statement regarding the fact that Blockbuster will still be more expensive than Netflix. For 1 DVD at a time it's about $11.99. I think most of Netflix subscribers will end up settling for one plan over the other, being the disks or the instant play. Blockbuster might have a chance if they had the streaming capability that Netflix does. Sure, you can rent a movie on your Blockbuster On Demand capable device, but people want to be able to watch what they want when they want it. Netflix offers a monthly access fee, while Blockbuster requires a payment every time you stream a movie. This gets to be a hastle for anyone who balances a checkbook or wants to budget their spending on entertainment.

mgardner750 12/5/2012 | 4:59:08 PM
re: Blockbuster to the Rescue!

The last time Walmart and Blockbuster tried to compete with Netflix on price, they both lost a lot of money in a price war. Netflix kept lowering their price until Walmart and Blockbuster surrendered. Walmart ended up transfering their members to Netflix.


Personally, I canceled the DVD protion of my Netflix acocunt already. I'm just going to just try the steaming for a while. Like another poster, I have netflix streaming on just about every device. A WiFI enabled TV, WII, PS3, DVD player, computer, notebook and IPAD2.


I also have slingboxHD that I use to watch my UVerse DVR while traveling outside of NA (like China) where I can't watch Netflix easily. I've tried masking by location using a NA server before to try to watch Netflix, but the bandwidth was poor impacting picure quality.

thepriebe 12/5/2012 | 4:59:01 PM
re: Blockbuster to the Rescue!

I can follow your logic. I'll be cancelling the DVD portion of my Netflix account as well. RedBox and DVDNow both offer DVD's for only $1, and I only watch a physical DVD maybe 2 or 3 times a month. I can't justify paying $7.99 when I can't get the full benefit from it. Also, if it's a movie you just have to have, go to Blockbuster. Their price restructure reduced the cost of the rentals; they're quite reasonable now.


My biggest problem with Netflix is their lack of desire to bring Netflix to the Linux community. An organization as large as them could get past the legal issues with viewing on open-source. I'm a Linux user, so I have to watch Netflix on my internet capable DVD player. This defeats the purpose of making great technology like Mythbuntu.


 

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