From the article linked to in the headline:

"Our customers have encouraged us to offer low-priced online DVD rentals, but we have no announcements to make at this time," Amazon spokeswoman Patty Smith said

In the understatement of the year, the article finishes with:

"Looking forward, Netflix said it anticipates an increasingly competitive market in the coming year."

I love Netflix. I've been a customer for years. I've met the people inside the company, all of whom I respect, a few who I call friends. But that doesn't change the fact that they have no clear strategy to maintain a competitive advantage in a market segment they created.

I wrote a more detailed analysis (The Future of Netflix is Uncertain) on my perspective on the future shape of online movie rentals, and, have additional thoughts on why Netflix is underestimating Blockbuster.