Video rental giant Blockbuster is cutting prices for its online rental service in what observers think could be a major move in a growing online price war among similar services.
Blockbuster announced December 22 that it would cut subscription prices to $14.99 per month plus tax, effective at once and good through January 2006, a $2.50 cut from its current fee.
The move is seen as a deliberate undercut of competitors like Netflix, whose online rental price has been $17.99 a month; and, Wal-Mart, which got into the online rental business with a $15.54 per month rental rate.
Blockbuster also said they planned to open 23 distribution centers by mid-January to service its online rental unit. That is believed to be over twice what they had when they launched the online rental service in August.
