Netflix wins round in online DVD-rental fight
When the head of Netflix said rival Blockbuster threw “everything but the kitchen sink at us,” the world’s largest video-rental chain responded by sending him a kitchen sink.
The message from last January’s interchange was clear: Blockbuster, with $6 billion in 2004 revenue and 5,500 domestic stores, intended to own online DVD rental, an $8 billion industry pioneered by Netflix.
“This year was about Blockbuster taking a run at us,” Netflix Chief Executive Reed Hastings recently told Reuters at the company’s Beverly Hills offices. “They chopped price. They emptied their balance sheet.”
But despite Blockbuster’s costly offensive, Hastings said Netflix was on track for net subscriber additions of 1.5 million for 2005 for a total of 4.1 million–the midpoint of its target range.
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