BLOCKBUSTER Online(TM) Changes Pricing

BLOCKBUSTER Online(TM) Changes Pricing

New Prices Reflect Enhanced Value and Service Levels

DALLAS, Aug. 9 /PRNewswire-FirstCall/ -- Beginning Aug. 19, 2005, BLOCKBUSTER Online is changing the price of its popular three-movies-out rental plan from $14.99 to $17.99, reflecting enhanced value and service levels for consumers.

"Our goal is to provide customers with the best online DVD rental experience available, and based on consumer response, we are well on our way to accomplishing that goal," said Shane Evangelist, senior vice president and general manager of BLOCKBUSTER Online. "In fact, since launching BLOCKBUSTER Online last August, we have built a subscriber base of more than 1 million members and, during the first half of 2005, we added approximately the same number of net subscribers as our largest competitor. Additionally, in order to achieve even faster shipping cycles, we have built the industry's most extensive distribution network. We now have 30 distribution centers and more than 200 Blockbuster stores fulfilling online orders, and we are adding more stores as online fulfillment outlets on a daily basis."

Besides receiving their movies more quickly, BLOCKBUSTER Online customers have a growing library of more than 40,000 titles to select from and should now experience increased product availability. Additionally, BLOCKBUSTER Online gives customers two free in-store rentals per month for as long as they subscribe to the service.

"As a result of our enhanced distribution network and the value BLOCKBUSTER Online offers, we believe we are on track to have 2 million subscribers on our service by the end of the first quarter of 2006 and that going forward we will have an even more substantial share of the growing online rental market," Evangelist concluded. "We intend to be a leader in this business and remain committed to being the high-value online DVD rental provider."

The new $17.99 price applies to all new customers, as well as customers who began subscribing to the service on or after March 1, 2005. Customers who signed up for the service prior to March 1, 2005, were guaranteed the $14.99 rate through Jan. 31, 2006.

The company has also adjusted the pricing of two of its other online subscription plans: five-movies-out will be $29.99 (previously $27.49) and eight-movies-out will be $47.99 (previously $37.49).

About Blockbuster Inc.

Blockbuster Inc. (NYSE: BBI; BBI.B) is a leading global provider of in-home movies and game entertainment with more than 9,100 stores throughout the Americas, Europe, Asia and Australia. The company may be accessed worldwide at www.blockbuster.com. Introduced in August 2004, BLOCKBUSTER Online is The Movie Store At Your Door(TM) providing a high-value online DVD rental service for in-home delivery, with the added benefit of two free in- store rental coupons each month.

This news release contains forward-looking statements relating to Blockbuster's online DVD rental service, including, without limitation, statements relating to (i) Blockbuster's beliefs with respect to its ability to achieve its online subscriber goals; (ii) the anticipated impact of such service on Blockbuster's market share and other business results; and (iii) Blockbuster's integration of this online service with its in-store capabilities. These forward-looking statements are based on Blockbuster's current intent, expectations, estimates and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others: (i) consumer demand for Blockbuster's online DVD rental service and the related impact of competitor pricing and product and service offerings; (ii) Blockbuster's ability to respond to changing consumer preferences and to effectively adjust its online service offering if and as necessary; (iii) Blockbuster's ability to effectively and timely prioritize and implement its initiatives and its related ability to timely implement and maintain the necessary information technology systems and infrastructure to support its initiatives; (iv) the extent and timing of Blockbuster's continued investment of incremental operating expenses and capital expenditures to continue to develop and implement its initiatives and its corresponding ability to effectively control operating expenses; (v) Blockbuster's ability to obtain favorable terms from suppliers, including on such matters as copy depth and uses of product; and (vi) other factors, as described in Blockbuster's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Cautionary Statements" in Blockbuster's annual report on Form 10-K for the fiscal year ended December 31, 2004 and under "Disclosure Regarding Forward-Looking Information" in Blockbuster's quarterly report on Form 10-Q for the quarter ended March 31, 2005.

Source: Blockbuster Inc.

CONTACT: Randy Hargrove of Blockbuster Inc., +1-214-854-3190

Web site: http://www.blockbuster.com/

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