Is there a real reason to NOT order movies online now? Netflix Will Not Match Blockbuster Cut http://www.reuters.com/newsArticle.jhtml?type=internetNews&storyID=7164341 NEW YORK/LOS ANGELES (Reuters) - Netflix Inc will not cut its price for online DVD rentals to match lower fees set on Wednesday by rival Blockbuster Inc. (BBI.N: Quote, Profile, Research) in an escalating battle for online subscribers, Netflix Chief Executive Reed Hastings said. Blockbuster, the largest U.S. video rental chain, said it was cutting the subscription price for its online rental service by $2.50 to $14.99 a month plus tax effective immediately, guaranteed through January 2006. The move came as Blockbuster grapples with growing online competition from Netflix. (NFLX.O: Quote, Profile, Research) and giant discounter Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) , and the threat that Amazon.com Inc will bring its new U.K. online service to the U.S. market. Hastings told Reuters Blockbuster's move shows it recognizes online rentals may make its huge network of retail stores obsolete. "In my view, Blockbuster just killed the video store by offering $15 pricing for online, but maintaining $25 a month for store-based subscriptions," Hastings said. "They are telling their customers to go online." Hastings said Netflix knew that Blockbuster was testing a lower price but believed it would have little impact on subscriber loyalty because Wal-Mart has offered a lower rate for several months. "We have no plans to change our price," he said. "This low price will help Blockbuster online but it may also help Netflix by converting store-based renters into online renters." Netflix charges $17.99 a month for online rental subscription while Wal-Mart offers a $15.54 subscription. Blockbuster's monthly subscription entitles customers to unlimited rentals, three movies out at a time, with no due dates, no late fees with postage included. Subscribers also receive two free in-store movie or game rentals a month. Its competitors' services have similar conditions. Blockbuster said from mid-January, its online unit would have 23 distribution centers, more than doubling its capacity from August, 2004 when it launched the service. Shares of Netflix closed down 7.14 percent, or 90 cents, at $11.70 on the Nasdaq on Wednesday but rose to $11.80 in after-hours trade on the INET. Blockbuster shares ended down 2.79 percent, or 27 cents, at $9.40 on the New York Stock Exchange but were up slightly, to $9.42 in after hours trade on the INET. Research Associates analyst Marla Backer, who had a "sell" rating on Blockbuster stock, cautioned investors to "avoid exposure to this (rental) sector" because of the intensifying price competition. In a note to clients, Backer said the price cut may indicate that Blockbuster underestimated Netflix's strength as the innovator of online DVD rentals, or it may believe Amazon.com Inc (AMZN.O: Quote, Profile, Research) , which just launched a rental service in the United Kingdom, will enter the U.S. market in 2005. Backer also said it was unclear whether revenue lost in the price cut would be offset by savings in fulfillment costs from Blockbuster's new distribution centers.
To bad there is like 10 new or semi new Blockbusters in my area. Now if this can only happen with CVS - you can't drive one mile in Houston without seeing one.(or one being built)
I wonder if I call Netflix and threaten to leave for Blockbuster for their lower prices if they would match Blockbuster's price to keep me? I think I'll try later this morning.
My gf just quit working at a video store last week, and I'm glad, because I'm sick of hearing about this ...
Doesn't this presume the idea that you have to have a subscription to rent movies??? I don't have a subscription to rent movies at Blockbuster. I've never paid a member fee. I go in...and rent a movie...whenever I want to. What am I missing in this article?? Because I don't get it. Explain this to me like I'm a 4 year old.
They do a subscription plan at location Blockbusters too. $25.00 to have 3 movies out at a time. But yeah, most people aren't on subscription plans. They rent them individually. Although it seems like this whole subscription plan deal is gaining more popularity, and might just be the choice rental plan in the near future. And personally, I'm really looking at the Hollywood Video subscription plan. There's one a couple blocks away from my house. It's $15 in order to rent 3 movies at a time. You can only have them out for the standard 5 days, and they won't have the biggest new releases available right away, but I think it's still a pretty good deal. Even if I have to wait a month or so to get the new releases, there are still plenty of films that I've been meaning to see.
On the off chance I rent a movie I typical just get one and do not get a subscription but then again I purchase a ton of movies.
Once people start using those kiosks in the grocery stores, Blockbuster will really be in trouble, I think. There's nothing better than renting a movie for $1 a night.
I do Hollywood Video on West Road in Northwest Houston. Its convenient and fast. Just be kind and rewind......you cheap bastards.
I am building a special DVD Rewinder, for sale NOW NOW NOW for the low low price of $99.95. Order now and receive a special pair of DVD handling gloves: This photograph is indistinct but I assure you, the gloves have five finger-holes. I can arrange special four-finger gloves if you specify so at the time of order. Sorry, no refunds. Void where prohibited. Must be 18 or older to buy. Not applicable in NJ, WY, or outside the contiguous United States.
maybe i'm a freak...but who checks out more than 3 movies at a given time, anyway? i barely have time to watch the 1 that i rent.
