Blockbuster cuts cheapest online DVD rental plan

Company had touted its $5.99-, two-DVD plan as matching the lowest-price subscription offer of Netflix.

Reuters

Nov. 22, 2006 8:00 a.m. PT

Blockbuster, the No. 1 video rental store chain in the United States, has withdrawn its lowest online-subscription price and is testing a program to allow its online subscribers to exchange DVDs at company stores as well as by mail.

Blockbuster, which has waged a price-cutting war against Netflix and others, decided to end a test plan of $5.99-per-month online subscriptions that allowed customers two DVDs per month, one out at a time. It had touted the plan as matching the lowest-price plan offered by Netflix.

Spokesman Randy Hargrove declined to give the reason for ending the plan.

Blockbuster's lowest-price nationally available plan is now $7.99 per month for three rentals per month, with one DVD out at a time.

The company also is allowing online customers in Colorado Springs, Colo., and other markets to bring viewed DVDs back to area stores to exchange them rather than mailing them in to receive the next title in their online queues, Hargrove said.

"We like what we're seeing but have made no announcement about a national rollout," Hargrove said.

Blockbuster's two-year-old online DVD rental service, which aims to reach 2 million subscribers by year's end, has been battling for market share against Netflix, which has about 5 million subscribers, and online-download companies like Amazon.com.