More Tailwinds for Netflix

"The worst of the competitive storm appears to have passed for Netflix, and its business remains fully intact," Brown said. His firm makes a market in shares of Netflix, but it does not have an investment banking relationship with the company. "That's not to say that it's going to be a perfectly smooth ride for this company, but things look favorable at this point."

Adding to Netflix's favorable outlook, analysts agree that at some point, Blockbuster will raise prices.

"It's not really a question of will they raise prices -- it's more a question of when," said Dennis McAlpine, an analyst with McAlpine & Associates. He doesn't own shares of Netflix and his firm has no investment banking relationship with the company. "If we can trust the numbers that Netflix has shown us, it doesn't seem like Blockbuster could be making any money at these prices."

In the past, Blockbuster has made it clear it's willing to accept losses in an attempt to get a foothold in the online subscription DVD business. However, the new formation of its board at the hands of activist investor Carl Icahn suggests that the company may shift its focus toward profitability and cash flow. That might involve a price increase on its DVD subscription service.

In his note, Hodges noted that Blockbuster already has been testing a $17.99-a-month subscription price in isolated instances. After Wal-Mart (WMT - Cramer's Take - Stockpickr) bowed out of the race and handed its subscribers over to Netflix, Blockbuster offered to match its offer with the inducement of two free DVDs, an offer that Hodges called a "veiled price increase."

Also, Hodges recently observed Yahoo! (YHOO - Cramer's Take - Stockpickr) home-page ads for Blockbuster's service for $4.99 a month. Reading the fine print, he discovered this offer was actually replacing a 30-day free trial offer with a first month discounted to $4.99.