• Reuters, Friday, December 21, 2007 11:45 AM

As Blockbuster's new management struggles to find a balance between expensive investments in online distribution methods and boosting its mature in-store rental business, it will raise prices for its Total Access subscription plans and lower prices for two DVD By Mail plans.

The price hikes will apply to new subscribers and some existing subscribers who are heavy users starting Dec. 27. Blockbuster also will cut the price of two of its By Mail plans by $1, to $3.99 for one DVD at a time for all subscribers and to $15.99 for three DVDs at a time for new subscribers.

The move was viewed as a positive for rival online DVD rental company, Netflix. Its shares rose 9.5% on Nasdaq. Citigroup analyst Tony Wible is upgrading his rating on Netflix to hold, saying Blockbuster's actions may create significant customer cancellations and provide Netflix with the ability to capture new gross subscriber additions with relative ease.

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