A little short term pain is absolutely worth it in order to bankrupt Blockbuster, which is exactly what is going to happen. Blockbuster cannot sustain this reduced price, which their own analysts admit will run up a deficit. BBI's Total Access plan is already creating red ink with every new customer and they will be closing dozens to hundreds of brick and mortar stores this year alone.
Netflix has two choices: match Blockbuster's price and sell themselves as the superior content provider that has thousands more movie choices than Blockbuster or continue with their one dollar higher price and sell themselves as the superior content provider again. I doubt anyone is going to switch plans for just a buck.
Bottom line, this is a gutsy but last desperation move by Blockbuster which may add subs in the short term, but which will drown Blockbuster even deeper into debt at a time when they can ill afford to lose even more money. Netflix perfected the model and executes it much better than Blockbuster, who has come to the dance too late.
Short term, a lot of bagholders are feeling very pleased with themselves for buying up Blockbuster's price today. Medium term, Blockbuster is going to have to tank as its loss per share will likely double. Mid to long term, Blockbuster goes belly up or is absorbed. End of the day, Netflix wins the war. NFLX is a very good deal at this price.
As Amazon says in another post, interesting that a bunch of shorts rate my post at one star but nobody actually addresses my points. Go ahead and disagree, but at least make this a discussion board. One easy way to tell a short is that they like to talk doom and gloom, but often have nothing specific to back up their belief. If you have something to offer in agreement or otherwise, fine. It's a lot more honest than giving every post that is opposed to your view one star and every post that suggests a short POV five stars. That's just chickens**t.