7/23/2007

Netflix cuts prices of two more rental plans

Filed under: — Aviran Mordo @ 11:07 am

Netflix Inc. cut monthly subscriptions for two of its most popular plans by $1 on Sunday, a day ahead of a quarterly earnings report that will show whether rival Blockbuster Inc has further dented the online DVD rental company’s growth.

Netflix now has cut prices on its four most popular plans this year, bringing them in line with the prices of Blockbuster By Mail plans.

The two companies are locked in a price war for the second time since Blockbuster launched its online service in 2004. Blockbuster plans to spend $170 million this year to win subscribers for its new Total Access plan, which gives online subscribers free in-store rentals.

Netflix CEO Reed Hastings said in April that he planned to grow the company’s subscriber base slowly but profitably until Blockbuster’s losses on Total Access force it to raise prices.

Most Netflix plans let subscribers take out an unlimited number of DVDs, but limit the number a customer can have at home at one time.

The new Netflix prices take effect on Sunday and apply to unlimited plans that were formerly $9.99 per month for one DVD at a time, and $17.99 for three DVDs at a time.

 

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