This is exactly the kind of thing I like to see as a contrarian investor because it allows me to average my price down in a stock I really like. I have said time and time again that Netflix, over the long run is going to win in the online movie rental business. Blockbuster’s “triple play” isn’t going to work long term because it’s costing them too much money. While Netflix subscribers now have the option to watch movies right from the website, Blockbuster users still have to return their movies via mail or through a brick and mortar store.
Where I think Blockbuster does have an advantage is in renting video games. These games can be rented in stores throughout the country, but the margin is much smaller.
Netflix is still the leader in my opinion. Their pricing is right. Shipping is fast and consistent and I really don’t care for going to the store to change out my DVDs. I prefer to just get them as they come, and if I want it sooner then I can just watch it online right from the site. How much more convenient can you get?
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