There is a major war going on, and the main one isn’t even the HD format wars. No sir, it’s the online/mail dvd rental business wars with the main combatants being NetFlix and Blockbuster. For a long time NetFlix was really dominating… but a couple of things have happened that have made a fight out of it.
First of all came the revelation that NetFlix was “throttling” it’s costumers. In other words, those who used the service the most were purposefully being pushed down in the waiting que for movies. This ticked a lot of heavy users off. Then Blockbuster introduced some wonderful ideas by letting people return their movies at the store if they wanted to, and getting additional free rentals if they do. I’m no Blockbuster supporter, but that move was genius.
This year so far NetFlix stock has dropped by 24% and they’re feeling lthe pinch not only from Blockbuster, but also the developing downloading services. in response, they have just recently announced that they are dropping their prices in an attempt to fight back. IMDB reports:
it is reducing the price of its two most popular subscription plans by $1.00 per month — $16.99 for the plan allowing customers to keep up to three DVDs at a time and $8.99 for the plan allowing them to keep one.
Nothing serves costumers better than a good old fashioned price war! Let’s hope Blockbuster is now forced to respond by offering something new as well.
