Update: Netflix is back up after being down for many hours.  According to TechCrunch and CNET , this happened as a result of a power outage in San Francisco yesterday that caused major sites–including Netflix, Craigslist, Typead, Vox, and LiveJournal–to go down.

Last night as I finished watching Season 3 of Felicity, I sealed up my three Netflix movies and got ready to stick them in the mail this morning. Logically, my next step was to wander over to my laptop to prep my queue for the next round of mail-in movie rentals. Upon heading to Netflix.com, I was greeted by the following message:

"The Netflix web site is temporarily unavailable. It is anticipated that the site will be available again at 11 PM Pacific Time."

Needless to say, I was pretty surprised. I was even more surprised when I received a similar message at 8 AM this morning, saying that the site would be back at 11 AM Pacific time. And, you guessed it, I am still surprised that it is now 2 PM Eastern time, and Netflix is still down, and is likely to be down for the rest of the afternoon.

These technical difficulties are occurring simultaneously with some pretty dramatic changes over at Netflix. According to the Washington Post, the company is reducing its prices for some of its most popular plans by $1 in order to earn back market share from Blockbuster, which gained customers after beginning a policy that allows them to exchange mail-order DVDs with those in the store. From the Post:

Wedbush Morgan Securities analyst Michael Pachter believes Blockbuster may have exposed Netflix's Achilles' heel by aggressively promoting the convenience of Blockbuster stores to build its online service. "Netflix has a broken model," Pachter said. "They aren't used to competition and now someone is competing against them very effectively."

Netflix ended June with 6.74 million subscribers, a decrease of 55,000 customers from April. It marked the first time Netflix's total subscribers have declined from one quarter to the next since the service began renting DVDs through its Web site in 1999.

It seems like Netflix is having a rough couple of days. If I had to guess, I would venture to say that these events are probably all intertwined. Does anyone have the details on the Netflix website?

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