Blockbuster Movie Pass Available Only to DISH Subscribers

DISH Network (NAS: DISH) plans to launch a $10 monthly package of streaming movies Oct. 1, but the company said Friday that its Blockbuster Movie Pass will be available only to its satellite TV customers.

Blockbuster president Michael Kelly said that the company, which DISH acquired earlier this year through a bankruptcy court auction, may develop a standalone streaming video service. But neither he nor DISH President Joseph Clayton offered a timetable for when the companies may launch a streaming video service that could challenge Netflix (NAS: NFLX) .

The Blockbuster Movie Pass also allows DISH customers to rent video games from Blockbuster retail outlets, which are included in the $10 monthly fee.

Some industry observers had expected that DISH planned to announce a standalone online video service on Friday that would allow it to target non-DISH customers and compete with Netflix's streaming video product. But the online video service DISH is offering is similar to TV Everywhere products offered by pay-TV rivals such as Comcast (NAS: CMCSA) and Verizon (NYS: VZ) . The biggest difference with DISH's offering is that it contains the Blockbuster brand and includes access to video games, and its subscribers will also be able to rent one DVD at a time from Blockbuster retail stores.

For an additional $10 monthly, DISH customers will get unlimited access to 100,000 TV shows and movies, including movies from the libraries of Starz, Viacom's (NYS: VIA) Epix movie channel, and Sony Pictures. DISH's strategy of allowing customers to choose DVD rentals over video streaming could help it attract subscribers from Netflix, which recently raised its rates and separated its DVD-by-mail service into a separate service called Qwikster.

Although DISH may eventually launch a standalone online video streaming service under the Blockbuster brand that it could market to any Web surfer, so far it appears to be using its $228 million Blockbuster acquisition as a retention tool for existing DISH customers.

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