Netflix Questions Blockbuster's Offer to Angry Customers

Netflix is questioning a competitive move by Blockbuster to take away angry customers upset over Netflix's price hike, saying Blockbuster's offer is not a better deal.

Some of Netflix's 23 million users are upset over the company's decision to charge customers under an unlimited streaming video and DVD by mail plan 60 percent more each month. Netflix has defended the move, saying the price increase from $9.99 to $15.98 is little more than a latte or two each month.

Bought out of bankruptcy by Dish Network, Blockbuster is offering Netflix customers who switch to Blockbuster by September 15 a 30-day free trial, and a $9.99 per month pricing option to receive one DVD at a time. Blockbuster is also offering $14.99 per month for two DVDs out at a time.

But Blockbuster's deal isn't as good as the deal Netflix is still offering customers, even after its price hike, a company spokesman said.

Why would someone do that when Netflix provides a free 30-day trial to new customers, and one DVD out a a time for $7.99 a month? said Steve Swasey, a Netflix company spokesman, according to Bloomberg. Competition is to be expected, but there's still no greater convenience, selection and value than Netflix.

In raising the monthly price for its unlimited streaming video and DVD by mail package by 60 percent, Netflix also split its price plan into two different tiers. Customers who want streaming video only can now get unlimited service for $7.99 and customers who want unlimited DVD by mail (one at a time) can get that service for $7.99.

Blockbuster does not offer streaming service. The company still relies on its brick and mortar locations, where customers can pick up and drop off DVDs, and mail delivery for its offer.

Blockbuster says it's offer has more value that Netflix's because customers do not have to wait 28 days to see some new releases as they do with Netflix, under deals with several Hollywood studios, according to a report from Bloomberg.