InCapta Inc (INCT)

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DVD-rental wars

Meanwhile, Netflix (NFLX), which last month missed second-quarter profit expectations due to rising costs in an increasingly competitive market, may have to drop prices to keep its customers.

Blockbuster (BBI), testing a similar DVD-rental service, appears to be offering a more aggressive promotion to lure consumers.

Blockbuster is offering a rival product to Netflix for $19.99, according to its Web site. But anyone signing up for Blockbuster will receive a notice offering an even steeper discount.

The promotional membership includes a three-month special at $17.99 for unlimited movies plus two coupons for free in-store rentals. Blockbuster's also offering a six-month special for $15.99 per month for unlimited movies plus two coupons per month for free in-store movie rentals.

Netflix charges $21.99 per month.

Shares of Netflix fell more than 8 percent to $17.70 in recent trading.

Blockbuster, which is to be spun off by parent Viacom, saw its shares ease 9 cents to $13.17. Viacom (VIA.B) (VIA) is a substantial shareholder in MarketWatch.com, publisher of this report.