Blockbuster Abandons Plans for Netflix-Like Streaming Service

Good news for Netflix: Dish has abandoned plans to turn its Blockbuster subsidiary into a streaming video service that would rival Netflix's Watch Instantly.

A Dish spokesman today confirmed that Blockbuster does not have a future in streaming. Charlie Ergen, co-founder and chairman of Dish, broke the news earlier today in an interview with Bloomberg.

"You make a lot of mistakes in business," Ergen told the news service. "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 acquired Blockbuster last year for $320 million after it made the winning bid in Blockbuster's bankruptcy auction. By September, Dish announced plans for a streaming and DVD movie rental service with Blockbuster that was bundled in with Dish's pay TV service. At the time, Dish said it was prepping a standalone, Netflix-esque streaming service as well, but nothing was ever announced.

Bloomberg said Dish envisioned a system whereby Blockbuster stores would sell gadgets that could be used to stream Blockbuster content, but Dish failed to secure regulatory approval to use satellite spectrum for terrestrial data and voice transmission.

A Dish spokesman said today, however, that the decision not to pursue streaming was ultimately "an economic argument rather than a matter of securing the rights on the spectrum."

In February, Dish announced plans to shut down 500 Blockbuster stores. At the time, Dish talked up the possibility of a future wireless business with the money saved from closing those stores. But now, as Bloomberg pointed out, Dish will be able to make a profit on its $320 million acquisition.

For more from Chloe, follow her on Twitter @ChloeAlbanesius.