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Originally published July 23, 2007 at 12:00 AM | Page modified July 23, 2007 at 2:02 AM

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Netflix lowers rental fees to counter Blockbuster

Online DVD rental pioneer Netflix is lowering the price of its two most popular subscription plans by $1 per month, relinquishing millions...

SAN FRANCISCO — Online DVD rental pioneer Netflix is lowering the price of its two most popular subscription plans by $1 per month, relinquishing millions of dollars in revenue in an attempt to regain the upper hand in a cutthroat battle with rival Blockbuster.

With the reductions announced Sunday, Netflix will charge $16.99 per month for subscribers who keep up to three DVDs at a time with no limit on how frequently the discs are mailed back in return for another movie. The price to keep one DVD at a time will fall to $8.99 per month.

The price cuts, which take effect Tuesday, match Blockbuster's fees for similar online services.

Earlier this year, Netflix knocked $1 off two other plans that had cost $14.99 and $5.99 per month.

The latest changes will have a bigger impact on Netflix's finances because they affect the plans most used by the company's 6.8 million subscribers. Management is expected today to quantify how much the price cuts will affect future profits.

Copyright © 2007 The Seattle Times Company

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