DALLAS — After hitting the pause button the day before, investors on Friday bid up shares of Blockbuster Inc., which is raising prices for many of its online customers.
Analysts said the price increases showed the world’s biggest movie-rental company was trying to fix the money-losing Internet business, where it has waged a costly price war against Netflix Inc.
Shares of Blockbuster did nothing when news of the price increases filtered out Thursday. But Friday, they jumped 16 percent before settling to end the day up 28 cents, or 7.9 percent, at $3.83.
Michael Pachter, an analyst with Wedbush Morgan Securities Inc., said investors decided Friday that Blockbuster’s new chief executive, James Keyes, will end the price war with Netflix.
“The market is realizing that this guy isn’t going to get in a battle to the death with Netflix,” Pachter said.
Blockbuster spent a couple years chasing Netflix in subscriber count but still trails 3.1 million to 7 million.
Both companies face competition from cheap DVDs at Wal-Mart and Best Buy, from cable and satellite video-on-demand, and from thousands of new discount DVD-rental kiosks in supermarkets and drugstores.
Those trends have contributed to keeping a lid on rental subscription rates. But last week, Blockbuster began quietly notifying some customers that they would have to pay more for many online-order, mail-delivery plans.
Price increases will take effect this week and range from $2 to $10 per month. The most popular plan, which lets members keep three DVDs out at a time, will go from $17.99 to $19.99 per month. A Netflix plan costs $16.99, although Netflix can’t match Blockbuster’s inclusion of five free in-store exchanges per month.
