Blockbuster Counters Netflix Price Hike

By Frank Heinz
|  Friday, Jul 15, 2011  |  Updated 4:42 PM CDT
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Blockbuster Gets Scrappy with Netflix

AP

Customers enter a Blockbuster video store in Dallas.

Just when it seemed the final nail was only a couple of good thwacks away from being fully in Blockbuster's coffin, Netflix not only stopped hammering, they are prying lose the nails.

In a highly criticized move, Netflix raised their prices earlier this week by as much as 60 percent to $15.98 per month for customers who want unlimited streaming films from their very dated online catalog and one DVD via U.S. mail at a time. If you want Blu-ray, add $2. If you want one or the other, it's only $7.99 a month.  Unless you want Blu-ray, in which case you'd add that $2 back in.

Not content to stay in the coffin, Blockbuster, which is now owned by Dish Network, has seized the moment to offer all unhappy Netflix customers a monthly subscription to their service for only $9.99.

That may look like it's $6 cheaper than Netflix, but let's compare apples to apples. Blockbuster doesn't include an unlimited streaming plan (their's is a la carte), so the plan offered is actually more expensive than Netflix's $7.99 plan that doesn't include streaming ($9.99 for Blu-ray).  Both plans give you one DVD at a time, though Blockbuster's offers the convenience of picking the title up that day in one of their stores, it includes Blu-ray discs and it also includes games.

Taking streaming out of the equation, with games and instant gratification part of the package and cost being the same if you want Blu-ray, it seems Blockbuster has the edge on this one.  If Netflix wants that edge back, they should at least stop charging the extra fee for Blu-ray discs.

To qualify, customers must bring in a Netflix red envelope to Blockbuster show they were a Netflix subscriber -- and that they are indeed stealing business from the California-based company.

This article originally stated Blockbuster didn't have a streaming platform. We clarified that it's not an unlimited plan and that movies can be rented a la carte. We regret the error.

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