Netflix playing hardball with subscription pricing [UPDATE]

Update: Representatives from Netflix have let us know these lower-priced plans are part of a test for selected Netflix subscribers, and the current prices that were lowered last month remain for new and existing customers.

Netflix is cutting the price of two of its most popular plans by $1 today, less than a month after its last cut in July. The pricing hasn't been changed on Netflix's rates page, but the company has been sending out rounds of e-mails to its customers about the change since last night, and made an announcement about it earlier this morning. The change covers the two- and three-out-at-a-time plans, the latter of which is the most popular and competitively priced.

The move is the latest in a series of aggressive cuts to compete with Blockbuster's popular Total Access service, which exploits Blockbusters brick-and-mortar stores to provide on-the-spot rental exchanges for about the same price as Netflix's offerings. Netflix has since fought back with its video-on-demand Watch Now service, which competes with Amazon's Unbox, and Movielink, which Blockbuster snapped up last week for just under $7 million. Interestingly enough, with this morning's change, Netflix is also slicing an hour of Watch Now usage off each of the plans, cutting them down to 13 and 16 respectively.

The three-at-a-time plan is Netflix's most popular, and started out at a flat $19.99 in late 1999. Both Netflix and Blockbuster have since been fierce competitors, lowering prices and adding new features to their services, despite the increasing costs in gasoline and postage.