Blockbuster's Online Service Shows Strength

Blockbuster's online service seems to be catching on, as the company added some 800,000 subscribers during the first quarter of the year, it said on Wednesday. Over the past two quarters, it has nearly doubled in size to 2.8 million members, and beat its larger rival Netflix in subscriber additions for the first time. Netflix added 481,000 new customers to end this past quarter with 6.8 million subscribers.

The quick growth has not come without a price however. The nation's biggest brick-and-mortar movie renter swung to a much larger loss, posting a net loss of $46.4 million compared to $1.9 million in the year ago quarter. Cost of sales increased 17 percent, while operating costs increased 3 percent.