Satellite TV provider Dish Network plans to launch a video streaming service with Blockbuster next month to compete with Netflix, Bloomberg news reported today.

The new service has been timed to coincide with an increase in Netflix pricing. Earlier this summer, Netflix announced it would charge separate fees for its DVD-by-mail business and streaming video service. Customers who want both options will now have to pay $15.98--60 percent more.

Dish bought a big chunk of Blockbuster's assets in April. Bloomberg said that executives from Dish and Blockbuster declined to comment.

Bloomberg's unnamed source said that the new service will likely allow Dish satellite customers to stream Blockbuster movies and TV shows over the Internet onto their TV sets. And Blockbuster may also offer the service to non-Dish customers as part of its mail-in video service, which would put it in direct competition with Netflix. Blockbuster.com currently offers on-demand movies for one-time purchase. But if this new service is launched, it would be the first time the company offered streaming video for a subscription, Bloomberg reported.

But the biggest blow to Netflix could be that the new Dish/Blockbuster service may include movies from Starz. Yesterday, Starz announced that it will not renew its contract with Netflix to provide its movie catalog to the streaming service.