Channels ▼
RSS

Blockbuster Takes On Netflix With Online Movie Rentals


Blockbuster Inc., which has seen a decline in profits from stiff competition in the in-store movie rental business, launched on Wednesday an online service that will go head-to-head with DVD-rental pioneer Netflix Inc.

Under the new subscription service, customers can rent up to three movies at a time for $19.99 a month, which is $2 less than Netflix's service. Blockbuster's online customers also will receive coupons for two free in-store movie rentals a month.

"We think now is the opportune time for Blockbuster to enter the online rental business, and we plan to quickly establish ourselves in this arena by aggressively marketing, pricing and combining our online program and in-store capabilities," Shane Evangelist, vice president and general manager of Blockbuster online, said in a statement.

Blockbuster's move to the Internet comes as the Dallas-based company faces slowing demand for its in-store movies. In late July, Blockbuster reported a 24 percent drop in earnings for the second quarter, attributing the decline to a "challenging rental environment."

To promote its online business, Blockbuster has signed advertising deals with Microsoft Corp. and Time Warner Inc.'s America Online division, which will run banner ads and promotional links on MSN and AOL, respectively. Customers, however, will be able to manage their movie queues from either online service "within months," Blockbuster said.

Blockbuster also offers a subscription program that lets in-store customers take home as many as three DVDs or videos a month and keep them for as long as they want for monthly fees ranging from $24.99 to $29.99 a month. The company plans to combine the in-store and online services in 2005. In the meantime, online subscribers will only be able to return DVDs by mail.

Blockbuster is a publicly traded unit of Viacom Inc. The companies, however, are in the process of separating.


Related Reading


More Insights






Currently we allow the following HTML tags in comments:

Single tags

These tags can be used alone and don't need an ending tag.

<br> Defines a single line break

<hr> Defines a horizontal line

Matching tags

These require an ending tag - e.g. <i>italic text</i>

<a> Defines an anchor

<b> Defines bold text

<big> Defines big text

<blockquote> Defines a long quotation

<caption> Defines a table caption

<cite> Defines a citation

<code> Defines computer code text

<em> Defines emphasized text

<fieldset> Defines a border around elements in a form

<h1> This is heading 1

<h2> This is heading 2

<h3> This is heading 3

<h4> This is heading 4

<h5> This is heading 5

<h6> This is heading 6

<i> Defines italic text

<p> Defines a paragraph

<pre> Defines preformatted text

<q> Defines a short quotation

<samp> Defines sample computer code text

<small> Defines small text

<span> Defines a section in a document

<s> Defines strikethrough text

<strike> Defines strikethrough text

<strong> Defines strong text

<sub> Defines subscripted text

<sup> Defines superscripted text

<u> Defines underlined text

Dr. Dobb's encourages readers to engage in spirited, healthy debate, including taking us to task. However, Dr. Dobb's moderates all comments posted to our site, and reserves the right to modify or remove any content that it determines to be derogatory, offensive, inflammatory, vulgar, irrelevant/off-topic, racist or obvious marketing or spam. Dr. Dobb's further reserves the right to disable the profile of any commenter participating in said activities.

 
Disqus Tips To upload an avatar photo, first complete your Disqus profile. | View the list of supported HTML tags you can use to style comments. | Please read our commenting policy.
 

Video