Netflix Lowers Costs As Blockbuster Prepares To Raise Prices

Netflix has reduced the cost of its 2-DVD plan by $1 to $13.99, matching a move made by Blockbuster earlier this month. Blockbuster had expected to be dancing triumphantly atop the battered and bankrupt corpse of its rival by now, but Netflix’s staying power is causing Blockbuster to re-think its strategy. By the end of the year, Blockbuster will raise the price of its Total Access service, which allows subscribers access to its retail locations.

The company said in the filing that it planned to modify its popular Total Access plan before the end of the year to “strike the appropriate balance between continued subscriber growth and enhanced profitability.”

Netflix’s email to subscribers, after the jump:

Dear Customer:

Great news! We’re lowering the price on our 2 DVDs out at-a-time plan to $13.99 a month plus applicable taxes. Now you can enjoy Netflix for less!

You don’t need to do a thing – except pay less. Your membership will automatically move to the lower price and be reflected in your Membership Terms and Details. The lower price will take effect beginning with your statement on or after June 28, 2007.

Membership Terms and Details:

Your $13.99 plan gives you 2 DVDs out at-a-time and you can also watch 14 hours of movies and TV episodes instantly on your PC each month – for no additional charge.

Enjoy!
Your friends at Netflix

Blockbuster Settles Fight With Netflix [NYT]
PREVIOUSLY:Blockbuster To Close 282 Stores
Blockbuster Weighing Charge For Total Access
(Photo: swruler9284)

Comments

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  1. rodeobob says:

    I have the Blockbuster “total advantage”, 3-disk package.

    If Blockbuster offers a higher-priced “total advantage” package and a lower-priced “mail only” package, guess which I’m taking?

    If Blockbuster raises their prices so that the Netflix 3-disk package is the same/cheaper, guess where I’m taking my business to?


    Blockbuster’s “total advantage” of being able to return disks in store for a free rental instead of mailing them back is hardly an advantage. The reasons why I signed up for the DVD-by-mail were a lack of selection at my local stores, and the hassle of having to return rented videos on a schedule. “Total advantage” ignores both of those factors.

  2. kaikhor says:

    I was going to comment on this during the Bloackbuster shutting down stores Entry. As a 2 at a time person, this excites me to no end. It may be only a buck, but I’ll take it!

  3. Notsewfast says:

    I have Blockbuster’s 2-disk total access (and have had it for around 2 years.)


    I originally signed up because Netflix couldn’t confirm my address on the free trial, and I stayed because blockbuster gave coupons.


    The Total access program is good and bad, while I like the “instant gratification” from being able to go to the store, There is hardly ever anything there and stuff is mis-categorized etc.


    If the price goes much higher, I’ll probably switch. But I do like the stisfaction form knowing that I pay $14 a month and rent as many movies as physically possible.

  4. Chi says:

    Don’t forget that Blockbuster is also closing several of their stores as well. I wonder how that’s going to impact the Total Access customers who now have to drive further for the convenience of returning a DVD to a store.

    Overall, I say things are still heating up!

  5. yg17 says:

    @Secret Agent Man: Instant gratification? Ha! Netflix has Watch Now. I want to watch a movie, and click a couple buttons and I’m watching it without getting off my lazy arse. I love how the Blockbuster commercials completely ignore this fact and act like with Netflix you have to wait a week for new movies.

  6. AtOurGates says:

    I liked getting that email this morning.

    To me, the Netflix “Watch it now” feature trumps being able to get free rentals from a Blockbuster store. They’re finally getting some good things on there, just last night I watched about half of “The Office Season 2″ online.

    Besides its limited selection, its only fault is not working in Firefox, Mac’s, or OS X.

  7. yg17 says:

    @AtOurGates: Yeah, I have to use Parallels to watch it on my Mac which kinda blows, but hey, better than nothing

  8. AtomikB says:

    @AtOurGates: You’re right! the “Watch it now” feature kicks the snot out of in-store rental. You get 18 hours per month of “Watch it now” for free with the 3-disk plan, which is more than I can use anyway. I don’t think I’ll ever need to set foot in a video store again.

  9. quagmire0 says:

    Bummer. I just signed up for Total Access 3 disc. If they raise the price, I’ll either bump it down to regular or switch – whichever’s cheaper. I really like the Total Access feature though, you can actually have 6 movies out at once that way (return 3 for 3 at the store, then they send you out the next 3 on your list).

  10. quagmire0 says:

    Anyone know if anyone has built a ‘watch it now’ script for Xbox Media Center? :D If so, I’m switching now.

  11. Notsewfast says:

    The ting about the watch it now feature (and I’m not saying the blockbuster system is better BTW, so let’s tone down the hostility) is that I can’t, for instance take that on an airplane. I travel pretty frequently, and its nice to take the disks in (also its much harder to rip web streams.)

  12. ceejceej says:

    Going into my local Blockbuster is such a harrowing experience, I don’t care if they are renting for free, I will never set foot in another one again! They NEVER have any new releases, their kids selection is a joke, and don’t even get me started on the gum-smacking, neck-rolling, foot-shuffling, tattoo-laden teenagers they have working there.

    On my last visit, they charged me $100 in late fees for a disk I had returned a few months earlier. Past experience taught me to never just drop the DVD in the slot, so thankfully, I had a receipt of the return on file. After days of the manager giving me the run-around and a few EECBs to Blockbuster’s CEO, they finally admitted their error. Turns out, a fired employee had stolen a bunch of DVDs, and the manager at that branch decided to just charge random customers for the stolen disks. Shifty bastards!

    I hope they close that Blockbuster for good and bring back the store it replaced… a Round Table Pizza!

  13. exkon says:

    No problems with blockbuster currently. I like the convenience of going to the retail store, I have one like 2 mins from house.

  14. tcabeen says:

    I got this email today! Oh, Joyous Day!

    I mean, yeah, it’s a buck, not a huge deal. Still, I’ll take it. Screw blockbuster. Bollocks. I love Netflix. They’ve been a little wonky from time to time, but I return a disc and they get it next day, then send out a disc that day and I get it the day after. On the 2-disc plan, I could feasibly watch a new movie EVERY STINKING DAY. But I don’t. I am awful about returning them. And I don’t have to pay for it.

    Are you kidding, it’d be more expensive (in late fees) for me to pick up movies for free from the library. Seriously. And now it’s even cheaper!

    This is perfect for me.

  15. MrEvil says:

    I have a Netflix 2 at a time plan (2 movies a week is about all I can spare). I’m glad the price is going down. My friend has Blockbuster Total Access and the irony is NONE of the franchise stores in our town participate in the program. No Returning his mail movies to the store for him.

  16. QTex says:

    Going into my local Blockbuster is such a harrowing experience, I don’t care if they are renting for free, I will never set foot in another one again! I hope they close that Blockbuster for good and bring back the store it replaced… a Round Table Pizza!

    X 2. The closest Blockbuster to me turned into a Chipotle. Can’t say I’m a huge Chipotle fan, but the fewer Blockbusters, the better. Go ‘Flix.

  17. bohemian says:

    We had the same thing happen as CeejCeej but at Hollywood video.

    We watch most of our movies through on-demand via our cable company. They cost the same as individual rentals at most of the video stores. If netflix starts offering new releases online on a single purchase basis we might start using them.

  18. Mom2Talavera says:

    I HAD Blockbuster online (3 out at a time ) for a year and a half. In the beginning they were really on the ball about getting the movies out and having the titles I wanted. Recently I CANCELLED my account with them and switched to Netflix(3 out at a time)

    Why? Because they rarely had the documentaries and independent films I wanted…and they screwed up my billing when it came time for me to enter a new CC number because the one I had was expiring…….my free passes from “Total Access” didn’t do me any good because my local BB sucks. I hope they close.

    Netflix rock…so far so good!

  19. TVarmy says:

    I had heard a version of Watch It Now for Firefox/OSX was being shown off at CES or some other event.

    Or maybe I dreamed it. Anyway, Netflix should make a Flash client or their own application for watching it. I miss the days when the rumor sites said Tivo would support watch it now. With the Amazon deal, that rumor is dead.

  20. Helvetian says:

    The Watch It Now has like what, five random movies from the 80s? Not interested, I’ve seen the catalog and it’s not worthy. And unlike Total Access, it’s not unlimited. I still prefer Blockbuster hands down, I get my movies the next day and never had a problem. Netflix on the other hand tried to SCREW me as a long time customer since 2000, when they did a mandatory rate change and didn’t grandfather my plan. So when BB launched, I quickly defected since I got a kick in the glass from Netflix. Then a year later, they lowered the pricing levels and continue to send me winback offers to come back. No thanks Netflix.

  21. hector7g says:

    @Helvetian: if by “five random movies from the 80s” available for Watch it Now you really mean over 3000 movies, then sure.

    ~~

    Buster has done nothing but screw me in past with their late fees, annoying employees, and lack of selection. Plus, their refusal to stock NC-17 and many unrated films just irks me to no end.

    The sooner they go away the better. [Although I guess that would mean no competition for the Nextflix, and in turn, higher fees. Still worth it to see blockbuster out of business.]

  22. Helvetian says:

    @hector7g: I actually joined Netflix recently again and couldn’t find any good movies. Aren’t the 3000 movies all older ones and not blockbusters like Eragon or Narnia?

  23. Helvetian says:

    It’s actually 2000 movies, which isn’t that great and it’s limited to your rate plan. It still doesn’t sound that great, and all of the newer blockbusters and more recent titles are actually excluded from the program. Though I will say it’s a nice start, very restricted but a new step in the right direction. Competition is good, without BB, Netflix cornered the market and dominated, and kept raising the plans every year. Now we are seeing innovation, new programs and tools and lower pricing.

  24. Andrewcool says:

    Netflix is the best for me right now. Like everybody else, i have blockbuster horror stories. Blockbuster always seems to not have the movies i want too.
    Right now i am staying with netflix.

    One con for netflix is that the “watch now” doesn’t support Firefox.

  25. Nickelking says:

    @AtOurGates: The watch it now feature is the main reason I downloaded IETab for Firefox, works like a charm!

  26. freakinalex says:

    I’m still sticking with Blockbuster. With the whole returning to the store to get free rentals, I find myself going to the store 2-3 times a week. Plus, with the extra two free rental coupons per month, I can get 2 free video game rentals per month, which are about $8 each.

    Not only that, but Blockbuster has exclusive rental rights to movies from The Weinstein Company, which, right now anyway, is putting out some movies I’d like to see.

    Of course, my Blockbuster has a decent selection, and what they don’t have, I can get online. If I lived half an hour from the nearest Blockbuster and it had a crappy selection, I’d go with Netflix.

  27. Mary says:

    I’ve been a Netflix member since 2001, and I’ve never looked back. I’m excited about that extra $1, especially when you considering I’m so close to a Netflix distro center that it takes literally 48 hours before I have a new DVD in my mailbox.

    I haven’t had any problems with them. I recommend them to family and friends, who have all had great experiences.

    BUT, I will put in the caveat that I haven’t really set foot in a Blockbuster since 1999. Back then their late-fee collections were almost mob-style and I wasn’t really okay with that. I have trouble forgetting that a company used to be like that, when it affected several of my friends in very terrible ways.

  28. Helvetian says:

    @meiran: I was a loyal Netflix subscriber and joined in July 2000. I was on a good plan, then sometime in 2003, they did a mandatory pricing change and required everyone to pay a higher fee citing USPS postal rates as the reasons and other operating costs. Netflix absolutely refused to honor the original term, and so I immediately canceled. Jan 2004, Blockbuster launches and I joined, never had a problem and my promotional plan is locked in for life. Netflix then was forced to lower their rates to compete, and have periodically tried to win me back, including offering me my original plan. No thanks Netflix, you didn’t recognize my loyalty when you just had 20,000 customers and tried to screw me, never going back. That and the throttle issue. BB is good, and people should give it a chance. Especially people who think because they’ve had bad experiences at a store, that the online will also be lackluster.

  29. hector7g says:

    @Helvetian: Well, I believe you when you say you’ve had good service from Blockbuster. And you’re probably right regarding the actual number of movies available on Netflix’s “Watch it Now.” I still enjoy watching a couple of movies on there now and then, but the feature standing on its own isn’t a reason to get Netflix. In my mind, using Total Access to go out of my way to a Blockbuster store with it’s barren shelves isn’t a reason for me to get ‘buster, either.

    However, I find it interesting that you say you won’t give Netflix another chance, while you advocate for others to try Blockbuster online–even when those people say they won’t go back because of prior bad experiences with that company.

    Not trying to be offensive, I just think it’s interesting that apparently Blockbuster is to me what Netflix is to you. And I guess you’re right, the competition is good for all of us.


    BTW, has Blockbuster online abandoned their store’s policy of no NC-17 or unrated movies? (just curious if I should really consider them in the future).

  30. Mary says:

    People have made such a huge deal about the “throttling” issue on Netflix. Sure, businesses should be transparent, but they can’t operate on a “first come first served” basis entirely, it wouldn’t work for their business. You can’t have only a handful of customers who watch and return movies in 24 hours (or, like several people I’ve known, burn and copy movies without watching and then send them back) who are the only ones that can access your new releases. That isn’t fair to your other customers.

    But I don’t use Netflix to rent new releases, I use my local RedBox in the grocery store for that. I use Netflix to catch up on the hundreds of movies I’ve missed plus television and everything else. I’ve never once in my six years of having an account with them had a “throttling” issue.

    As for raising prices, will you be quitting Blockbuster when they raise their prices at the end of the year as this article states? Prices go up, that’s the way of the beast. Netflix has done what, one price increase in six years? And then their prices are going back down now?

    I don’t see it as sufficient reason to hate a business.

    As for me not going back to Blockbuster, it’s probably the same reason you won’t go back to Netflix (as another poster pointed out). I don’t trust them to actually make good on their customer service promises. Plus, I have no reason to, there’s not a physical Blockbuster store anywhere near me, so their “benefits” don’t apply to me.

    Gotta say though, I do reccomend RedBox. People should check it out.

  31. Helvetian says:

    @hector7g: Thanks Hector. I don’t know about the NC17 policy, that kinda annoys me. Regarding my comment to try BB, it was directed at people that have never tried the online service. The people who bash it, before they’ve ever used the service or the ones that refuse tro try online based solely on bad experiences at a store.

    I had Netflix for many years, but they way I was treated as a loyal customer is my personal reasoning for defecting.

  32. Helvetian says:

    @meiran: BB does not force customers to accept new pricing plans, they grandfather as long as you keep your account active and don’t switch, like many mobile carriers do. Netflix forced plan changes with little notice and no opt-out. The only way to avoid it, was to cancel service. This is a monopolistic practice, I had to capitulate or defect, so I left. This is bad business, especially for loyal customers. It wasn’t until BB launched, that Netflix was forced to scale back the pricing.

    BB is going to charge more for TA, that is an optional service. Instead of the difference being $1, it could be $3 or more – who knows. Either way, you are locked in to whatever plan you have and I have a plan that has not been available since 2004. BB has not forced me to change.

    And RedBox, have a link? Thanks.

  33. Mary says:

    I didn’t know about Blockbuster’s grandfather, that’s a good business plan, if not sound for their profit margin.

    I actually have a defunct Netflix plan that they’ve allowed me to keep despite not offering it to new customers anymore. But I accept that sometimes prices go up. I have a monthly-cd program I’m a member of and the prices just raised by a $1 a month, it didn’t affect my budget and their service had been good so I was willing to pay for it. But if you had bad service, and somebody else offered something more suited to your needs, then that’s great for you. That’s the real spirit of competition : )

    Redbox is an actual physical box, like a vending machine for movies. Their website is [www.redbox.com] and I’m a huge fan of their system. If you know you want a new release you can just find out which boxes in your area have it, and reserve it to go pick up, and only pay $1 a night.

    But if you’re in a more rural area it might be a little harder to use. I’m lucky, there seems to be one on every corner here.

  34. Helvetian says:

    @meiran: Yeah rates go up all the time, and sometimes I accept them or not. It does all depend upon whether I am satisfied and willing to maintain the service, and ultimately whether I am interested.

    Competition is great, otherwise Netflix would be at $29.99 for one DVD at a time by now with the previous trend of rate hikes. I do believe they now grandfather, because of BB but prior you were forced to accept new changes.

    Never heard of Redbox, but I have heard of [www.dvdexpress.net] Which are also kiosks that rent or sell DVDs for $1, they are mainly the northeast like NYC.

  35. xredgambit says:

    Ive tried both services and I just prefer blockbuster. It’s mostly the free game rental a month that gets me. Plus the Total Access plans are the same price but they have a mail only plan for $1 less. So you can get the same service (kinda minus the VOD netfilx has) for the same price. But it’s nice to beable to go to a store.
    I’ve heard of the horror stories, but I’ve never seen one nor have I had one. I don’t know how they were like, but they seem good now.

  36. SJActress says:

    I used to work in a tiny video store known for foreign and hard to find movies. Many people LOVED going in there because it was such a unique store. Going there was “an experience”. It shut down a couple years ago (not out of business, owners just retired).

    I don’t see how anyone would want to deal with the “experience” at Blockbuster. I still can’t figure out why it takes 20 minutes to start a rental account. Where I worked, it took 2 minutes tops (and we got all of the same information).

    I also don’t see how they’ve figured out how to put EVERY SINGLE TITLE in the wrong place. What are they doing all day?

    Blockbuster sucked BEFORE Netflix existed, and I hope Netflix puts Blockbuster out of business.