Online streaming giant Netflix held a First Quarter 2011 meeting on Monday and unveiled healthy numbers that support its growing popularity: over 3 million new subscribers in 2011 so far.
Following the fiscal merrymaking, an email Q&A provided investors an opportunity to broach future issues facing the company, such as: ‘What exactly is going on with DISH Network and Blockbuster? Will they compete with Netflix?’
Netflix CEO Reed Hastings had an answer.
“We really don’t know what Dish is up to,” admitted Hastings in an investor Q&A, “but presumably they paid a couple hundred million for Blockbuster not for its technology but for its brand.
It’s a well-known brand. It would be consistent to do that if they had plans to launch a service with a fair amount of content and a fair amount of marketing such that it would make sense to pay $300 million to be able to use the Blockbuster brand.”
These comments echo those found in Netflix’s quarterly Letter to Shareholders, which foresees DISH launching “a substantial subscription streaming effort.” Netflix’s answer to future competition in general? “Grow as fast as we can so we can afford more content, more marketing, and more R&D than our competitors.”
Earlier this month DISH Network acquired what was left of the former movie rental leader for $320 million. Blockbuster filed for Chapter 11 bankruptcy protection last year, and since has struggled to regain its footing in a home entertainment battle that’s changed drastically in the years since it once ruled.
Complimenting Hastings’ prediction, DISH announced last week it would not renew the leases on over 1,000 Blockbuster locations — shrinking the company’s brick-and-mortar presence to around 600 storefronts. Many have speculated the move precludes a major push into the digital streaming space against competitors, such as Amazon Prime, Hulu Plus and YouTube.
The main prize, of course, being Netflix’s current top dog position.
Blockbuster’s current online service Blockbuster On Demand is relegated to pay-by-the-title movie rentals and purchases. A revamp to include streaming TV shows and a wider breadth of films would theoretically put the service on equal footing with Netflix — just tens of millions of paid subscriptions behind.
DISH Network has yet to announce anything official regarding its long-rumored entry into a subscription-based streaming service — or even if that is exactly the route the company will take.
With Netflix set to release its own exclusive series in “House of Cards” next year and YouTube planning premium channels with original programming, one thing is for sure: consumers will not be short on home entertainment options any time soon. (Via Home Media Magazine, The Wall Street Journal)
Would you support a new Blockbuster streaming service? Or are you more than happy watching Netflix? Let us know in the comment section.