Netflix: Price Cuts and Free Downloads

Netflix cuts monthly bills. Thanks, Blockbuster. Netflix offers free downloads. Thanks, Netflix.

By + More

Netflix just told me it was lowering my monthly bill by $1. Thanks! But I'm thinking I may lower the bill $3 more. Thanks again, Netflix! Oh, and we should also thank Blockbuster, which is nipping at Netflix with its own home-delivery service.

Blockbuster and its thousands of stores suffered as Netflix picked off customers with a new, efficient service of delivering movies through the mail. Blockbuster started it own mailing service, but it only really took off when Blockbuster recently added store rentals as an option for customers who otherwise get their movies through the mail. Blockbuster's online service is now gaining market share, though the company is losing money in the process. Netflix is still profitable, but less so, and its stock is near a two-year low.

While Blockbuster's offering is tempting, Netflix has kept the upper hand in our house with a new Internet downloading service. So far, it works like a champ. The quality doesn't match a DVD, but it's plenty watchable on our large-screen TV, to which we have attached an Internet-capable PC that is needed for downloading.

Each month, Netflix gives us an hour of movie watching for each dollar we spend at the service—or a total of 17 hours for us under the new price we just got. But I like the free download option enough that I'm thinking we can get by with two DVDs a month from Netflix, a deal that costs only $14, instead of the three we now get for $17.

So competition from Blockbuster is saving us a dollar at Netflix. And we can save $3 more through competition from, uh, Netflix. It probably can't last, but for now it's fun time in rental land.


You Might Also Like