Netflix reduces online DVD rental fees

MUMBAI: The online movie rental sector in the US is getting competitive as Netflix Inc. is lowering the price of its two most popular subscription plans by $1 per month.

The move is an attempt to help the company gain an upper hand against rivals Blockbuster Inc.


The Los Gatos-based company will charge $16.99 per month for a plan that allows subscribers to keep up to three DVDs at a time, with no limit on how frequently the discs can be mailed back in return for another movie. On a similar plan that lets customers keep one DVD at a time, the price will fall to $8.99 per month.

The price cuts which take effect from Wednesday match the fees charged by Blockbuster for similar online-only services.

With this, Netflix has brought down its price for a second time this year, the earlier one being a $1 cut from two other plans that had previously cost $14.99 and $5.99 per month.


The latest price cuts are, however, expected to have a bigger impact on Netflix‘s finances because the price reductions are being made on the two plans that have over 6.8 million subscribers.

The company management is expected to quantify how much the price cuts will dent profits in an afternoon conference call scheduled to be held after the company releases its second-quarter earnings.

Netflix‘s stock price has dropped 24 per cent so far this year after competition offered from Blockbuster and video downloading services offered by Apple Inc. and Inc.

Apart from movie rentals, Netflix also offers more than 2,000 movies and TV shows that can be streamed over Internet-connected personal computers.


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