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In August 2004, Blockbuster introduced an online DVD rental service in the U.S. to compete with the established market leader, Netflix.Blockbuster's U.S. online operation started with around 10 warehouses; further expansions every year have brought that number to 41, plus 1400+ stores in the Blockbuster Online network. Most Blockbuster independent franchises do not honor the Total Access program. The company had 1.5 million subscribers at the end of the third quarter of 2006. Blockbuster's move to follow the business pattern with its online rentals as was established by Netflix prompted Netflix to sue Blockbuster for infringement of patent. Blockbuster counter sued with a counterclaim alleging deceptive practices with its patent which it alleges was designed to maintain an illegal monopoly. The suits were eventually settled, and while the terms were not disclosed it was later reported that Netflix recorded a settlement payment from Blockbuster of $4.1 million in the second quarter of 2007.Blockbuster now rents out Blu-ray Discs and DVDs online.Currently Blockbuster offers several online rental plans. Until July 26, 2007, Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Blockbuster currently offers the original plans for the original price with limited in-store exchanges and for a substantially higher price point, the consumer may have the original plan with unlimited in store exchanges. As of September 2007, the online system was changed to the new online system of a few in store exchanges instead of unlimited. On March 2nd, 2009, Blockbuster once again changed policy for the unlimited exchanges for online movies for store movies. Now, if you had the unlimited online movie plan, when a customer exchanged a online movie for a movie from a retail store, the customer could keep the movie as long as they wanted to and not incur late fees, but any movies in their online account would not be sent until the movie was returned and then the next movie would be released. Prior to this, if you traded in your movies at the store, the movies next in line on the online queue would be sent because it was scanned at being received at the store.At the end of 2006, Blockbuster Total Access had 2.2 million customers, exceeding their original goal of 2 million, according to the official website. After an aggressive media campaign that accounted for much of Blockbuster's $46.4 million net loss in the first quarter of 2007, the Total Access subscriber base surpassed 3 million customers in total, marking the company's highest subscriber growth quarter ever.  

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