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.

Your friends at Netflix

Blockbuster Settles Fight With Netflix [NYT]
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Blockbuster Weighing Charge For Total Access
(Photo: swruler9284)

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