NetFlix Takes A Tumble - As Does Their Website

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Tuesday July 24 was especially challenging for online movie retailer Netflix (NFLX).

The company that wheels and deals movie rentals that are delivered to subscribers homes via the United States Postal Service saw a 7% decline in their stock price - and their website went down.

The two incidents were said not to be related.

The website downtime was blamed on technical issues and the fall of the stock price had to do with a losing a number of subscribers to their service along with a number of other factors. Overall, their stock is down 38% for the year, the stock price is the lowest it’s been since June 2005.

Their rival, Blockbuster has made gains in the online movie rental business and offer a little more than Netflix. Customers that rent online have the added convenience of being able to return their movies to physical locations instead of having to mail the movies back.

In an effort to stiffen their position against Blockbuster, Netflix has dropped their monthly fees by $1.00 on it’s two most popular plans. This will bring them in line with Blockbuster’s “online only” service.

Netflix expects their full-year profit to range from $42.4 million to $52.4 million, down from an April forecast of $55 million to $60 million. Netflix earned $35.4 million through the first half of this year.

What are your thoughts on online movie rentals? Do you believe there’s a strong future in it?

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