Since its founding in 1997, online DVD-rental service Netflix (NFLX) has grown steadily. It's challenging Blockbuster (BBI), which has started...

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Since its founding in 1997, online DVD-rental service Netflix (NFLX) has grown steadily. It’s challenging Blockbuster (BBI), which has started its own online rental service.

But the growth has come with a cost: higher expectations. The company recently reported a 36 percent jump in first-quarter profit. Yet its stock still plunged 24 percent the day after, as it trimmed its forecast for full-year earnings per share to a range of $1.16 to $1.29, from $1.18 to $1.30.

The industry is also sensitive to price changes. If Blockbuster were to slash its rates, it would likely hurt Netflix’s growth.