Rich Fiscus
23 Jul 2007 11:19
Netflix has announced a price decrease of $1 per month for its two most popular plans. The 3 DVD at a time plan will drop to $16.99 a month, while the single disc at a time plan will be $8.99.
The cuts, which match rival Blockbuster's online only plans, are the second this year. Earlier in the year the price for the two DVD per month and two disc at a time plans also dropped $1.
Acknowledging Blockbuster has been eroding its market share, Netflix in April warned Wall Street that it won't add as many subscribers this year as it originally envisioned. The company has added 4.5 million subscribers since lowering the price of its 3-DVD plan from just under $22 in November 2004. The company is also making a lot more money, with earnings of $49 million last year compared to a $6.5 million profit in 2003.
Last year Blockbuster added an option for subscribers to pay an additional $1 per month, in return for which they can return movies to Blockbuster's traditional brick and mortar rental outlets and even pick up some movies from those stores. Online rental has at least a two day turnaround time as discs have to be sent and received through the mail.
Netflix countered with a small, but growing, selection of movies that can be streamed from their website.
After a loss of $49 million in the first quarter of this year, Blockbuster has said they will be modifying their service ``to strike the appropriate balance between continued subscriber growth and enhanced profitability."
Source: ContentAGENDA