After losing more than 12% on Monday, Netflix (NASDAQ: NFLX) shares are down an additional 6% today, dropping to a new two-year low. Yesterday's plunge came as the company announced plans to reduce two of its monthly subscription plans by a dollar, dropping the most-popular $17.99 plan to $16.99 per month and reducing the single-disc $9.99 plan to $8.99. Good news for Netflix users, but potentially bad news for shareholders, as the move - at least initially - means a smaller bottom line.

Last night after the closing bell, the company reported second-quarter income of $26.6 million, or 37 cents per share, a 50% increase from the previous year. Revenue improved by 27% to $303.7 million. Excluding items, NFLX would have banked 31 cents per share, easily topping analysts' expectations of 23 cents. But for the first time in the company's eight-year history, the total number of subscribers dropped. At the second quarter's conclusion, Netflix had 6.74 million subscribers, a net loss of 55,000 in the three-month reporting period. The equity was quickly trading lower in after-hours activity.

Then today, Netflix subscribers (such as myself) awoke to find our beloved site offline. The company's home page -- an intuitive work of website engineering that allows users to rate recent returns, rearrange queues, and share reviews with fellow subscribers -- crashed at some point Monday evening and is, as of 2:15 p.m. Eastern time, still unavailable.

If you've been following the movie rental industry lately, you are well aware of the price war emerging between Blockbuster (NYSE: BBI) and Netflix (NASDAQ: NFLX). It should come as no surprise that Netflix disappointed Wall Street after the bell today.

Although Netflix reported higher net profits for the quarter, the company lost subscribers for the first time in the company's history. Its expectations for the future also terribly disappointed investors. The company said it expects to finish the year with between 6.8 million and 7.3 million subscribers vs. previous expectations of 7.3 million to 7.8 million. Netflix also cut its expectations for revenues and net income.

This disappointing earnings report comes on the heels of the company announcing price cuts to compete with Blockbuster's rental service. The price cuts alone managed to send the stock down 12% on the day, then the earnings announcement after the bell sent the stock down another 5%.

If you're an investor, I'd strongly advise against jumping into this sector. Naturally, companies engaged in a price war are destroying one another's margins, revenues, and the like -- factors that aren't attractive to owners. However, trading opportunities could evolve in the sector depending on expectations. For example, I know several smart traders betting on a second half rally in Blockbuster because they think the analysts' expectations are low for late this year into next year as a result of a weak second quarter.