Can Blockbuster Sink Any Lower?

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Just when it looks like Blockbuster is doing something right, the DISH Network (NAS: DISH) subsidiary dumps garbage all over its newfound goodwill.

So Netflix (NAS: NFLX) made some bold decisions that were sure to drive a couple million customers away. There was the pricing-plan shakeup, the decision to let Liberty Starz (NAS: LSTZA) walk away from the negotiating table, and the inexplicably clumsy division between DVD and streaming plans. And at exactly the right moment in time, DISH launched a streaming service under the Blockbuster brand.

Sure, it's an inelegant plan that requires a DISH subscription, and therefore looks more like a DISH promotion than a stand-alone streaming service. But it made Blockbuster and its adoptive parent look refreshingly opportunistic.

In an attempt to start a good old-fashioned Astroturfing campaign, the company's official Twitter account started sending out invitations to make Netflix look bad: "Tweet why you're leaving Netflix. Top 3 creative tweets using No. GoodbyeNetflix will win a 1-year subscription!"

So far, so SOP. What better way to start a grassroots movement than to pour some fertilizer all over Cyberspace? Political parties and candidates do this all the time. In business, prominent online and offline Astroturfing attempts have come from otherwise respectable companies including McDonald's (NYS: MCD) , Philip Morris (NYS: PM) , and General Electric (NYS: GE) . Even corporate model citizen Procter & Gamble (NYS: PG) occasionally hires PR firms to run fake grassroots campaigns. It's business as usual and an industry of its own, my friends.

But Blockbuster didn't stop there. Why settle for random Tweeters when you can manufacture support from influential bloggers, journalists, and other thought leaders? So messages went out to an unknown number of people in that category, sometimes going as far as asking for a Twitter connection in order to send the real request behind closed doors.

That strategy backfired. Some of the targets posted Blockbuster's words out in the open, because their journalistic integrity is worth more than a free 1-year subscription to the new Blockbuster service -- a roughly $120 value, but you need a DISH account first.

It's an epic fumble. You get the feeling that DISH and Blockbuster are somewhat desperate to make this streaming idea work, and willing to cut ethical corners to get it done.

Netflix remains weakened and Blockbuster might capitalize to some degree, but the marketing department needs to rethink their tactics. Follow that quest by adding a couple of strategically chosen tickers to your Foolish watchlist:

At the time this article was published Fool contributorAnders Bylundowns shares of Netflix but holdsno other position in any of the companies discussed here. The Motley Fool owns shares of Philip Morris International.Motley Fool newsletter serviceshave recommended buying shares of Philip Morris International, Procter & Gamble, McDonald's, and Netflix.Motley Fool newsletter serviceshave recommended creating a bear put spread position in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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