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NetFlix Raises Rates for Blu-Ray

March 31, 2009 | Author: Ibex Marketing

Netflix subscribers are shocked, shocked to discover that Blu-ray discs cost the company more than standard DVDs, and that Netflix is increasing their subscription fees for those users who want to receive their movies in high-definition. Reaction to the announcement made in the company blog yesterday generated hundreds of angry comments from subscribers.

The increase is modest, by my measure. Fees will increase by $1 plus $1 for each unlimited DVD out-at-a-time in your subscription. If you get one at a time, it costs $2 more a month; two at a time, $3 more. And so on. At retail, a Blu-ray disc typically costs about $10 more than the standard DVD disc. I don’t know what Netflix is paying — they probably get an excellent discount based on their volume — but I wouldn’t be surprised if the Blu-ray price is as much as 60% higher than the standard price.

I am not a Netflix subscriber, but this is not a company that appears to nickel and dime its customers. I don’t believe that they’ve raised their rates lately, in spite of postage increases. And they don’t charge anything extra for unlimited access to their streaming downloads on the Internet. (Blockbuster charges per movie for downloads .) Sure, it would be nice for Netflix to offer high definition movies at no additional cost, but I doubt that they can afford to keep adding free bonuses indefinitely. Yes, the Blu-ray surcharge does add about 20% to your subscription cost, but it’s optional. You can choose to just get the standard DVDs and not pay anything extra if you prefer. I think Netflix has been fair in this situation, and still offers a great value.