I never thought I’d use the melodramatic phrase “cutthroat world” to refer to the streaming video industry, but I’m starting to think it’s the only appropriate way to describe it. There’s a vicious battle being raged online, and the casualties are starting to pile up.
Fans and critics alike are worried that Netflix will soon lose its lead in the streaming video game, but Netflix has yet to surrender its position. Instead, it’s an old video favorite – Blockbuster Video – that has taken a severe hit.
Dish Network acquired the famous video rental chain for $320 million in April 2011, months after Blockbuster filed for bankruptcy. Later that year, Dish announced its intentions to offer a bundled movie rental service along with its paid TV service, as well as plans to use Blockbuster’s content provider relationships to build a streaming service to rival Netflix.
Dish closed hundreds of Blockbuster stores in preparation for the transformation, but now has decided to abandon their plans for the development of the streaming service.
“You make a lot of mistakes in business,” Charlie Ergen, founder and chairman of Dish, told Bloomberg. “I don’t think Blockbuster is going to be a mistake, but it’s unclear if that’s going to be a transformative decision.”
It’s a surprisingly humble admission from a powerful businessman, although the consequences of the decision to scrap the streaming program may not be as dire as they seem. Some of the remaining 900 Blockbuster stores – particularly those in rural areas – continue to turn a profit. Dish also still owns Blockbuster's customer list, which could be an invaluable source of a potential core base for a future DVD-by-mail subscription service, if Dish decides to go in that direction
According to Bloomberg, there’s no doubt that the purchase of Blockbuster was a wise move: “shuttering and selling all 1,700 Blockbuster stores that Dish purchased would make Ergen’s company about $300 million, turning Dish a profit without using the brand for anything.”
Netflix may have lost one competitor, but it has gained another: Toys ‘R’ Us. The popular children’s toy store may seem like an unlikely foe, but last week Toys 'R' Us Inc. debuted a new streaming entertainment service called Toys 'R' Us Movies. The new Toys ‘R’ Us Movies store offers 4,000 titles of movies and TV shows for the children's and family markets, available for rent or purchase. Find out more about Toys ‘R’ Us Movies here.