Dish, currently engaged in licensing struggles with cable networks and local broadcasters, has abandoned its goal of rebranding Blockbuster as a Netflix competitor. Dish purchased the bankrupt Blockbuster in April 2011, with a goal of moving the Blockbuster brand into an online movie streaming service, while also using its remaining 1700 stores (at the time) to cell mobile handsets for a satellite-networked mobile service. However, the FCC didn't approve a petition that would allow Dish to divert some of its satellite capacity from direct broadcast service to a terrestrial data and voice transmission system, and efforts to secure streaming rights for films and TV programming proved too expensive.Since first acquiring Blockbuster, Dish has managed to sell off or close almost half of Blockbuster's stores, and said more would be sold or closed as leases run out. Dish CEO and founder Charlie Ergen explained, "you can't make enough money from just selling DVDs." Still, the Blockbuster purchase wasn't a total bust - Dish used Blockbuster's inventory to create a DVD rental by mail service branded as "Blockbuster@Home," which also included some streaming services from Dish's On-Demand partners.
In the meantime, details are starting to emerge on Amazon's licensing deal with Epix. In addition to the standard upfront fee to licenses a movie for streaming, Amazon agreed to pay a premium once the number of subscribers to the Prime Instant Video service reaches a certain level. A Reuters story opined,
"The generous terms of the deal, announced in September, provide the strongest evidence yet that Amazon is willing to pay up to be a player in this market as it faces a dwindling demand for DVDs--once its core entertainment offering--and tough competition for its Kindle Fire tablets."Some analysts termed the 'pay for performance' aspect made the Amazon-Epix deal an example of 'online video deals 2.0'. According to Wedbush Securities analyst Michael Pachter, "Hollywood loves it because they can say Amazon is paying us 'X' and we want more from you... It's a club they can use to beat Netflix over the head."
Sources - Dish abandons plan to re-vamp Blockbuster as Netflix competitor, FierceOnlineVideo
Amazon ratchets it up a notch with Epix streaming movie deal, FierceOnlineVideo