Blockbuster is finally coming to the iPad. The video-rental company, which Dish Network acquired in April, has been trying to remake itself in the eyes of consumers after last year's bankruptcy sale. "When the technology changes, when the customer changes, you better change," Dish Network CEO Joe Clayton said in September. "The winds of change are blowing ... more Americans are demanding an easier way to view video."
To this end, Dish has been pushing more digital initiatives, including the Blockbuster Movie Pass (today, renamed Blockbuster @Home), a rumored multiroom DVR "Hopper" that it's expected to unveil today at CES, and an upgraded iPad app that includes streaming access to Blockbuster, HBO, and more premium content. It's a step in the right direction, certainly, but the question is whether Blockbuster is offering too little—or perhaps way too much—too late. Having arrived on the iPad years after competitors with a Blockbuster subscription service tied to purchasing a traditional Dish cable package, it's unclear whether Dish is even trying to compete head on with Netflix and Amazon, or instead trying to gain a leg up against Time Warner and Comcast.
To gain access to Blockbuster @Home, consumers will need to first purchase a subscription to Dish Network. Basic packages start anywhere from $19.99 to $24.99 per month with an annual commitment; to add Blockbuster, which includes access to both streaming content and DVDs by mail, customers must pay an additional $10 per month. Price is the first issue here. It's unlikely consumers, who just months ago started the equivalent of Occupy Los Gatos after Netflix raised its prices (which start at $7.99), would be interested in leaving Netflix to pay more money with Dish.
The more pressing issue here though is Dish's complicated value proposition. We tried to untangle it recently, and it was far from easy. If you order the total package, you'll gain access to 3,000 movies and TV shows from Blockbuster @Home on your television, if you have a set-top box; 4,000 movies and TV shows available through Blockbuster on DishOnline.com; the ability to purchase VOD content on an à la carte basis; DVDs by mail; video games by mail; in-store exchanges; and the ability to watch on-demand content through the Dish Remote Access app. (Depending on your package, you will gain access to Blockbuster, HBO, Epix, and other premium channels through the Dish Remote Access app. There will be no separate Blockbuster app, it seems.) You can also watch live TV through the Dish Remote App—that is, if you have a "ViP 922 Slingloaded DVR or the ViP 722 or 722k DVR with the Sling Adapter accessory." (Can't wait for my mother to call with questions about that.) Lastly, Dish also plans to partner with app developer Thuuz to create a Google TV app that tracks "excitement levels" in sporting events.
(This must be quite a dramatic shift for Blockbuster, considering former CEO Jim Keyes once said it made his "head hurt" to imagine streaming content through a Nintendo Wii.)
The value proposition here has all the elements of car-salesman marketing—the feeling that for just this small extra price, they'll throw in the fancy brake pads and year's supply of Turtle Wax. If you have any doubt about how complicated it is to sign up for the service, just try it yourself. The following image reflects only the first step in an arduous process that looks about as fun as reading the updated terms and conditions on iTunes:
Given, car salesmanship has always been common among cable providers, which are seemingly intent on selling you more things you don't know whether or not you need. But the trend here is moving toward offering simple packages, whether through clean straightforward subscriptions from Netflix, Hulu Plus, or Amazon, or slicker viewing experiences from startups such as Peel.
Dish ought to start treating Blockbuster as a unique asset, with a simple value proposition. (They did, after all, spend a reported $320 million purchasing the struggling company.) Instead, Dish is treating Blockbuster as just another channel or service you can add to your package, similar to HBO, Cinemax, or Showtime. Why not create a Blockbuster streaming app to push subscriptions? Why not create a streaming-only plan, as Netflix has done? The company doesn't even refer to it as "Blockbuster Movie Pass" (or "@Home") on its order form—only as "Movie Pass," a premium package buried among 23 other options.
Dish CEO Joe Clayton was right to say that consumers are looking for an "easier way to view video."