Wal-Mart aim: Nix Netflix

Retailer cuts online DVD rates

The nation’s biggest seller of DVDs has decided to get more aggressive in its challenge to online rental retailer Netflix.

Wal-Mart announced Tuesday it has added a lower-priced category of $15.54 to its monthly online DVD Rental service and opened five new distribution centers for quicker delivery.

Netflix, the leader in online DVD rentals, has 20 distribution centers and is continuing to add more throughout the year in an attempt to bring overnight shipping to 70% of its customers by the end of the year. The company offers unlimited rentals for $19.99 a month, with a maximum of three movies out at a time.

Wal-Mart’s previous lowest monthly charge was $18.86 for a maximum of three titles out at a time. The monthly charge for customers to keep four titles at a time is $21.94.

“Based on the valuable feedback from our early subscribers, we made significant improvements to our service,” said Wal-Mart DVD Rentals manager Matt Sevick.

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Wal-Mart added distribution centers in California, Arkansas, New York, Nevada and Indiana, with plans to open more. The company launched a trial version of its service in November with one distribution center in Carrollton, Ga.

(Jennifer Netherby is a reporter for Variety sister publication Video Business.)