Blockbuster LLC on Thursday unveiled a DVD-rental promotion aimed at swiping customers from Internet-based rival Netflix Inc. (NFLX), taking aim at the online video service two days after Netflix raised its prices.
Blockbuster, the assets of which Dish Network Corp. (DISH) acquired out of bankruptcy, has been slashing its prices recently amid fierce competition from Netflix and vending-machine operator Redbox, a subsidiary of Coinstar Inc. (CSTR).
In a move aimed specifically at the online rental service, Blockbuster is offering a 30-day free trial to Netflix customers who switch to one of its two most popular DVD rental plans. The plans, called Total Access, allow customers to rent one disc at a time for $9.99 a month or two discs at once for $14.99 a month.
Netflix on Tuesday said it is separating its streaming and mail-order DVD subscription plans in the U.S. to better reflect the cost of providing each plan. Netflix customers who want both unlimited streaming and to receive one DVD at a time by mail must subscribe to two plans, each for $7.99. Previously, subscribers paid $9.99 under a single plan for the same services.
Blockbuster said it offers an added edge over Netflix by letting customers choose between mailed DVDs and access to brick-and-mortar stores. Customers must bring a piece of their Netflix DVD envelope to take advantage of the offer.
DISH shares were recently off 2% at $30.97 Thursday amid a broad decline in the market. Netflix shares were down 3.6% to $288.05, trailing the market.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com