Blockbuster Fires Back at Netflix's Price Hike Accusation

Includes: BBI, NFLX
by: Herb Greenberg

When we last left Netflix (NASDAQ:NFLX), the company was blaming much of its lousy quarter on Blockbuster (BBI), which had rolled out its own online service. It's "not a question if, but when Blockbuster will reset prices," said Netflix CEO Reed Hastings, who said Blockbuster's low prices weren't "economically feasible."

Blockbuster CEO John Antioco fired back yesterday on its earnings call:

Our competition has said that they will simply wait us out until we change our proposition. They may have a long wait. We have no intention of making any changes to our Blockbuster Total Access proposition anytime soon unless we feel these changes will fuel our growth even faster or improve our cost efficiencies and service metrics.

BBI vs. NFLX 1-yr chart: