Monday, December 26, 2005

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."

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