Satellite television provider Dish Network recently admitted that it may have been a bit shortsighted in its plans to transform video rental chain Blockbuster into a serious Netflix competitor.
“You make a lot of mistakes in business,” said Dish Network founder and Chairman Charlie Ergen in an interview with 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.”
Dish purchased Blockbuster for $320 million in April 2011 after the company filed for bankruptcy. The TV provider expected to grow subscriptions to its primary satellite business by bundling a Blockbuster streaming video and DVD-by-mail service together. And while that strategy seems to have worked, Dish’s other expectations of rivaling Netflix fell short.
Unlike Netflix, Blockbuster was supposed to act as a sort of Redbox-like drop-off point that meant customers didn’t have to wait for the mailman in order to swap out movies. In reality, the retail stores couldn’t make enough money to justify staying open. Part of that had to do with Dish not being approved to build its own high-speed wireless network — as well as a line of products to run on that network, which would have been in Blockbuster stores.
Ergen said Dish has no plans to continue pushing Blockbuster as a Netflix competitor in the future. Instead, the company is looking at building a new web TV-based subscription service that would give people only a handful of popular cable channels at a fraction of the price they pay for traditional cable/satellite TV. Ergen, however, says it could be years before these plans come to pass.
Blockbuster is far from the only problem the tenacious satellite TV provider is facing these days. Dish is also locking legal horns with many of the major broadcast TV networks over its Hopper DVR technology, which allows subscribers to auto-skip commercials instead of just hitting the fast-forward button on recorded programs.
More recently, Gannet’s broadcasting Arm threatened to yank its channels from Dish if it didn’t stop using Hopper. Reuters reports that Dish offered to pay Gannett 200 percent more to renew its licensing agreement before it ends on Sunday, an offer Gannett has declined thus far.
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