Dish Network Corp., the second largest U.S. satellite-TV provider, will introduce a Blockbuster streaming-movie service to compete with Netflix Inc. next month, according to a person with direct knowledge of the plans.
The timing is designed to coincide with price increases being implemented by Netflix, according to the person, who declined to be named because Dish’s new offering isn’t public.
Starting this month, Netflix said it will charge separate fees for mail-order and streaming videos, raising the price by 60 percent to $15.98 for customers who want both options. Dish hasn’t set a price for its rival service, the person said.
Dish acquired almost all of Blockbuster’s assets in April for $320 million out of bankruptcy. Aaron Johnson, a spokesman for the Englewood, Colorado-based company, declined to comment.
The new service may also include on-demand Blockbuster movies that Dish satellite customers can watch on television sets, the person said. Blockbuster may offer the streaming service in conjunction with its mail-order and in-store DVD rentals.
While Blockbuster.com offers on-demand movies for one-time purchase, this would be its first subscription-based streaming service. Netflix, based in Los Gatos, California, has 24.6 million U.S. customers and a library 20,000 movies and television shows available online.
The offering is expected to include movies from Starz LLC, said the person. Starz announced yesterday it had halted negotiations with Netflix to renew an online-viewing deal for next year.
Netflix fell $21.39, or 9.2 percent, to $211.88 at 3:10 p.m. New York time on the Nasdaq Stock Market. Dish fell $1.17, or 4.7 percent, to $23.83.
Dish ranks second in the U.S. satellite-TV behind DirecTV, based in El Segundo, California.
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