SAN FRANCISCO -- Online DVD rental pioneer
Netflix will charge $16.99 per month for a plan that allows subscribers to keep up to three DVDs at a time, with no limit on how frequently the discs can be mailed back in return for another movie. The price for a similar plan that lets customers keep one DVD at a time will fall to $8.99 per month.
The price cuts, which take effect tomorrow, match the fees charged by Blockbuster for similar online-only services.
Earlier this year, Netflix knocked $1 off two other plans that had previously cost $14.99 and $5.99 per month.
The latest changes will have a bigger impact on Netflix's finances because the price reductions are being made on the two plans that are most widely used by the company's 6.8 million subscribers. Netflix declined to specify how many subscribers use each plan.
Management is expected to quantify how much the price cuts will dent profits in an afternoon conference call scheduled to be held after the company releases its second-quarter earnings today .
Netflix's stock price has dropped 24 percent so far this year amid worries about tougher competition from Blockbuster and video downloading services offered by much larger companies like Apple Inc. and
Netflix also offers more than 2,000 movies and TV shows that can be streamed over Internet-connected personal computers.