Competition may let up in online DVD rental market

August 10, 2005

It looks
like the price war in the online movie rental market may be easing. Unwilling to
continue at a loss, Forbes is reporting that at least Blockbuster is raising prices
soon.

Blockbuster's unwillingness to incur losses at the $14.99
price point was a "major driver" to raise prices. On its quarterly
earnings call, Blockbuster announced plans to increase its basic online
DVD subscription rates from $14.99 to $17.99, effective later this month.

Blockbuster cited the value-added in-store
rental feature as the reason for the increase.

So this puts Blockbuster at the same 3 at a time out
price point as Netflix. In the article they say the low cost for the last few
months has lured some 1 million subscribers to the Blockbuster
program.

Source: Forbes