Dallas - Movie rental giant Blockbuster (NYSE: BBI) announced on Thursday that its third quarter revenues fell 5.7% to $1.24 billion, from $1.31 million in the same period a year ago, while the company's net loss was $35 million, compared with a $24.7 million net loss a year ago.

The company cited the closure of 526 of its retail stores during the quarter for the revenue decrease, but said this was offset by a $79.2 million increase in revenues from its online rental service, Blockbuster Total Access.

The service now claims 3.1 million subscribers -- down from 3.6 million in the previous quarter -- compared with the over 7 million now counted by rival Netflix.

Blockbuster said that changes in service plans at the online service it effected during the third quarter "significantly reduced the number of unprofitable Blockbuster Total Access subscribers [and] improved profitability across the remaining subscriber base."

The company also said it will no longer break out its online subscriber numbers in financial reports.

Blockbuster has implemented a plan it says will reduce costs by $45 million, "through the elimination of staffing and operational redundancies in the company's in-store and online corporate support structure and through improvements in other operating efficiencies."

"Going forward, we are focused on protecting our core rental business, developing new retail opportunities, and becoming the preferred provider of digital entertainment," said Blockbuster chairman and CEO Jim Keyes.

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