Netflix to Charge more for Blu-Ray

Looks like Netflix will start charging more if you rent Blu-Ray titles.

Here's the story.

It only makes sense, and frankly, I've been wondering why it took so long.

Tags: blu-ray, charge, increase, more, price

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Permalink Reply by Slappy on July 25, 2008 at 9:55am: Yeah I am surprised it took this long. The sad part is blu-ray will go down in price just like VHS, then DVD did but the rental prices won't. I am not mad though I want them to keep making a profit so I can keep getting movies.; ▶ Reply to This

Permalink Reply by Spindaddydad on July 25, 2008 at 10:07am: Well, and this makes me wonder how they will add the price points. Am I charged more JUST when a Blu-Ray title is shipped from my queue, or am I charged more just because I have my account activated for Blu-Ray? Because, as we know, not many titles have been released yet on Blu-Ray.

In other words, what if my account is activated for Blu-Ray, but none of the titles that I watch for that month are actually Blu-Ray discs?; ▶ Reply to This

Permalink Reply by Kiya on July 25, 2008 at 10:38am: That is a very good question.; ▶ Reply to This

Permalink Reply by Slappy on July 28, 2008 at 8:22am: In other words, what if my account is activated for Blu-Ray, but none of the titles that I watch for that month are actually Blu-Ray discs?

Really good question. It is going to be difficult to do anything that is 100% fair to the customer without going to fluctuating bills, which causes more man hours in accounting departments which cuts into profit.; ▶ Reply to This

Permalink Reply by Biff on July 25, 2008 at 11:10am: Eventually, within a few years, regular dvds will stop being made and there will only be Blu-ray. Hopefully by the time that happens the price will be cheaper.; ▶ Reply to This

Permalink Reply by Paul Idol on July 28, 2008 at 8:46am: Frankly I think this is quite crappy. Blu-Ray prices have been going down pretty quickly lately and should continue to do so for awhile, and there's no way to add a Blu-Ray price premium that's fair without destroying the entire flat-fee structure of the Netflix service. Will we get charged for simply adding Blu-Ray to our account even during periods when we don't happen to rent any Blu-Rays? Will we get charged extra per Blu-Ray rented? Per Blu-Ray rented per day? And if they're going to charge extra for Blu-Ray rental, why in god's name aren't they charging extra for streaming? Setting up and maintaining the streaming software and hardware infrastructure is costing them a hell of a lot more than adding Blu-Ray inventory, which doesn't require any significant changes to their business process or fulfilment system at all. Nor, I'm sure, will the extra cost go away no matter how low Blu-Ray wholesale prices fall.

Finally, I think this is fairly short-sighted. The barriers to entry in the streaming business are fairly low; Netflix likely will face many competitors in that space, and those competitors will be able to ramp up and offer compelling services quite quickly. The barriers to entry in the rent-by-mail space, by contrast, are very significant, which is perhaps the biggest single reason that Netflix remains the number one vendor. Getting people hooked on renting Blu-Ray discs helps preserve their entrenched position; getting people more used to viewing online dissolves the competitive advantage they've spent years building. And lest people respond "yes but physical media is so last year, downloading is the future", I'd like to point out that Blu-Ray is growing dramatically faster than DVD did. Downloading multi-gigabyte files isn't going to be routine and mainstream for quite awhile.; ▶ Reply to This

Permalink Reply by Spindaddydad on July 28, 2008 at 9:05am: Blu-Ray prices have been going down pretty quickly lately and should continue to do so for awhile
Yet, blu-Ray prices are still much higher than DVD.

Will we get charged for simply adding Blu-Ray to our account even during periods when we don't happen to rent any Blu-Rays?
Do you know this for a fact? Where's a source?

And if they're going to charge extra for Blu-Ray rental, why in god's name aren't they charging extra for streaming?
Extra charges for streaming is coming. Stand by.

Would you expect to pay more for digital satellite service over traditional? Paying more for better quality is always the way consumerism works, and should not be unexpected. Prices of digital broiadcasting is coming down all the time, why should I have to pay more for an HDTV?

The barriers to entry in the streaming business are fairly low; Netflix likely will face many competitors in that space, and those competitors will be able to ramp up and offer compelling services quite quickly
on-line streaming is the way of the future. That's why Netflix is positioning itself to be a major player. Blu-rays, DVDs etc are old technology and will go away eventually.; ▶ Reply to This

Permalink Reply by Paul Idol on July 28, 2008 at 11:03am: Will we get charged for simply adding Blu-Ray to our account even during periods when we don't happen to rent any Blu-Rays?
Do you know this for a fact? Where's a source?

Uh, did you not notice the question mark? I'm asking how it'll work, not saying exactly how it'll work.

And if they're going to charge extra for Blu-Ray rental, why in god's name aren't they charging extra for streaming?
Extra charges for streaming is coming. Stand by.

And do you know this for a fact? Where's your source?

on-line streaming is the way of the future. That's why Netflix is positioning itself to be a major player. Blu-rays, DVDs etc are old technology and will go away eventually.

You're just parrotting the mainstream view and completely failing to address ANY of the substance of my argument.; ▶ Reply to This

Permalink Reply by Paul Idol on July 29, 2008 at 4:43am: Yet, blu-Ray prices are still much higher than DVD.

Would you expect to pay more for digital satellite service over traditional? Paying more for better quality is always the way consumerism works, and should not be unexpected.

Furthermore, the wholesale prices of DVDs already vary widely. Criterion discs are quite expensive, for example. Should there be an extra fee to rent Criterion titles from Netflix? AFAIK, the cost of Blu-Ray discs falls within the ordinary range of costs already, and furthermore is well within line with what average DVDs used to cost just a few years ago. Should Netflix have dramatically lowered their subscription fees as wholesale prices of DVDs dropped?; ▶ Reply to This

Permalink Reply by The Real Uncle Bob on July 29, 2008 at 11:14am: Extra charges for streaming is coming. Stand by.

I wouldn't be so sure that its coming soon. I know my turnaround time on mailed disks has extended greatly, so they are saving postage on me at least.

The coming Christmas season will no doubt spread the Roku goodness to many new members (I'll bet Netflix adds many attractive IW titles as the season approaches), so there won't be increases before Christmas. And if they don't want to churn those noobs right out, they're not likely to go crazy with the rates right away.

IW must pay for itself eventually, but we don't know that it can't happen under the current rate structure. Does anyone know if they mentioned it during the last stockholders conference call?; ▶ Reply to This

Permalink Reply by jeldobar on July 29, 2008 at 5:58am: Personally It totally depends on how they say they are going to do the extra charging. Like you guys said is it " pay per disc " or a Monthly charge because you have Blu Ray activated.

If they try to Up my Monthly Payment just because Blu Ray is activated , I would de-activate my Blu Ray in a Heartbeat because there are not even close to enough Blu Rays in my queue to merit paying more. Plus I like how my BluRay player upgrades the SDVD. So I would be missing nothing really.; ▶ Reply to This

Permalink Reply by RJP on July 29, 2008 at 9:00am: Pretty much my feelings exactly - depends on how they implement the new charge. If it's per disc actually rented somehow, and reasonable, then it might merit consideration. If it's a flat monthly charge, with no influence over if you even get the Blu-ray rental, then that's probably a no-go. I'll just get the Blu-rays at Blockbuster under their Total Access plan - you know they'll maintain a competitive advantage by not charging more.

And you're right about upscaling. After about 18 months of watching Blu-ray and upscaled standard DVDs on my PS3, there are only certain types of movies where the Blu-ray format really makes that big a difference. Most movies now a days are shot digital anyway, and upscaling works just fine. Exceptions are big blockbuster action movies, and movies with lots of detailed landscape shots.

Personally, I believe if Netflix doesn't think through this Blu-ray pricing very carefully, their actions could be the death knell for Blu-ray. You want to promote the market for buying players, not throw up more price obstacles (increased cost of renting discs) to dissuade people from buying players. The Blu-ray market will die if more people don't buy players, and just throwing more catalog titles out there in Blu-ray format, and charging more to rent them is obviously not a remedy.; ▶ Reply to This