Blockbuster Cuts Price of Online Rentals
Video chain Blockbuster Inc on Friday announced it would lower the price of its online DVD rentals to undercut a similar move by Netflix Inc. that sparked a stock a sell-off of both companies’ shares.
The cuts caused talk on Wall Street of an impending price war in the still-growing business that Netflix pioneered but has been joined by Blockbuster, Wal-Mart Stores Inc. and could soon see the entry of Amazon.com Inc.
Blockbuster Chief Executive John Antioco told Reuters the company would reduce the monthly subscription price for online DVD rentals to $17.49 from $19.99, and the move would become effective “the week after next.”
He said the 12.5 percent reduction came in response to Netflix’s announcement one day earlier that it would cut its monthly subscription fee to $17.99 from $21.99 in an attempt to double its subscribers to 4 million by the end of 2005.