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Wal-Mart slashes DVD rental prices

Conglom enters the race between NetFlix, B'buster

Wal-Mart.com joined the online DVD rental war Tuesday.

The company slashed the monthly subscription price of its rental service plan for three movies out at a time from $18.76 to $17.36, undercutting recent reductions by Netflix and Blockbuster.

Netflix announced during a conference call with analysts in mid-October that it was slashing its fee, effective this week, by $4 to $17.99. The cut was an attempt to drive subscriptions to its service in anticipation of Amazon.com’s entry into the online rental game.

Blockbuster immediately followed suit, cutting its price to $17.49 for its three-movies-out plan.

At the time of the Netflix announcement, the company’s stock, which has a history of volatile swings but had been trading in the teens prior to the announcement, plummeted about 40% and has been hovering at around $10 ever since.

The Wal-Mart news was not officially announced Tuesday, but a spokesman confirmed the price change to Daily Variety sister publication DVD Exclusive shortly before the market closed Tuesday.

Although Wal-Mart is by far the biggest seller of DVDs, the price change is not expected to affect its stock price since the fledgling online service is a tiny fraction of the business. It has yet to be seen how and if it will affect Netflix and/or Blockbuster.

All three companies allow subscribers an unlimited number of monthly rentals with no late fees and three movies out at a time. The services also offer different price plans for fewer or more DVDs out at a time.

Wal-Mart is cutting the fee only on its three-movie-out plan. All other plans will retain current prices, a spokeswoman said.

(Jennifer Netherby is a reporter for Daily Variety sister publication DVD Exclusive.)

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