LOS ANGELES (Reuters) - When the head of Netflix Inc. said rival Blockbuster Inc. 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 told Reuters at the company's Beverly Hills offices. "They chopped price. They emptied their balance sheet."
But despite Blockbuster's costly offensive, Hastings said Netflix was on track for net subscriber additions of 1.5 million for 2005 for a total of 4.1 million -- the midpoint of its target range.
Meanwhile, Blockbuster, which has been roiled by management and debt problems, saw the subscriber base at its 16-month-old online service stall at 1 million.
Chief Executive John Antioco told Reuters that Blockbuster Online was "proud of what it has accomplished in 2005 with over 1 million subscribers in over a year after it was launched."
Antioco had threatened earlier this year to leave the company -- and take a $54 million severance package with him -- during a proxy fight launched by dissident investor Carl Icahn. Credit and more info:
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