I’ve been fascinated with the battle between NetFlix and BlockBuster (and Wal-Mart) for a long time. I’ve long thought that the also-rans had nothing on NetFlix. Recently though, it appeared that NetFlix was slipping as they even got close to losing me as a customer. I’ve been a customer of theirs since 1998 and my attitude has always been “you’ll take my NetFlix subscription from my cold, dead hands.” I recently took a free trial of BlockBuster’s online service and was underwhelmed by it. This note from Briefing.com sums up my experience pretty well:

08:16 NFLX Netflix: Short-term blip, or real turnaround? (10.46 )

Some skeptical, some positive following Netflix announcement of significantly higher subscriber estimates… SG Cowen out noting they believe the key driver of the co’s higher Q4 subscribers are win-backs from Blockbuster Online following its recent 18% price reduction. Firm’s analysis has shown that Blockbuster Online has experienced significant movie title shortages vs near-100% availability at Netflix. Nevertheless, they expect Blockbuster Online to significantly expand its inventory and distribution capabilities over the next few months. Remains cautious on shares due to competition…. Thomas Weisel out saying they are increasing DecQ and 2005 estimates for Netflix primarily to reflect higher than expected demand elasticity of DVD rentals at the $18/month price point. Firm’s DecQ ending subscribers est goes from 2.422mn to 2.581mn, revenue from $132mn to $139mn, GAAP EPS remains $0.03, and GAAP EPS before non-cash comp from $0.08 to $0.09. Rates Peer Perform… Smith Barney out noting this could be the first in a series of positive datapoints as Netflix moves into what has historically been it’s seasonally strongest two quarters of the year. Maintains Hold and $13 tgt.

Looks like NetFlix still has the upper hand. Another round to David (vs. Goliath).