CONSUMER WEB SERVICES DVD Movie Rental Plot Pits Tiny Netflix Vs. Blockbuster.(A)(Internet & Technology)

Byline: Patrick Seitz

Investor's Business Daily

A small online company that rents digital video discs by mail is proving to be a thorn in the side of video rental giant Blockbuster Inc.

Netflix Inc. of Los Gatos, Calif., is taking a bite out of the fast-growing DVDbusiness just as Blockbuster is trying to change out the inventory of its stores from videocassette tapes to the new format.

Netflix has signed up 300,000 subscribers who pay $19.95 a month for unlimited

DVD movie rentals. That's $6 million in revenue a month and counting. The privately held company has offered its monthly subscription service for just over a year.

Blockbuster, the Dallas-based retail chain, has taken notice of Netflix. It recently countered Netflix's subscription offer with one of its own.

"Blockbuster is about 100 times bigger than us, but they're coming after us," said Reed Hastings, chief executive officer of …