Netflix rocked by new plans from Blockbuster

June 13, 2007 Shares of Netflix Inc. were in free fall Tuesday after Blockbuster Inc. unveiled new low-priced online rental subscription plans, and an analyst downgraded Netflix to "sell" and cut his price target by $10 as a result. Blockbuster said Tuesday that it has decided to offer new online subscriptions under the moniker Blockbuster By Mail that are about $1 cheaper per month than its existing plans under the Blockbuster Total Access name, but don't allow for the choice of online or in-store rentals all the time. "The online rental market is projected to increase 43% during 2007 and through Blockbuster Total Access and now Blockbuster By Mail, we intend to capture our share of that growth, broaden our customer base and remain the fastest growing online rental service in the marketplace," said Shane Evangelist, senior vp and GM of Blockbuster Online.

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