question of the day: What’s up with Netflix charging more for blu-ray rentals?

Netflix subscribers were surprised recently when the DVD-at-home service announced a price increase for access to blu-ray rentals. The sliding scale increase — if you’re on the 3-at-a-time plan, you pay an additional $4 per month; if you’re on 8-at-a-time, you pay a whopping $9 more — applies merely to have blu-ray discs in your rental queue, even if you don’t actually receive a single blu-ray disc in a given month. And with the long waits Netflix’s blu-ray customers have been reporting, not actually receiving a single blu-ray disc in a given month is a frequent occurrence.

Don Reisinger at CNET’s The Digital Home called bullshit on the fee increase:

Predictably, many looked at the announcement as Netflix capitalizing on consumers. Those who are upset with the release say the increase is too high. And since Netflix doesn’t need to pay for packaging, and it probably gets a discount on media, given the number of copies it needs, they believe that the company is gouging customers.

I contacted Netflix for comment regarding this contention. A representative responded to me within a few minutes. He said the cost of Blu-ray discs is 30 percent higher than that of DVDs, and more of the company’s customers are switching to Blu-ray, generating higher operating expenses. A $1 additional charge for Blu-ray access on all plans wasn’t cutting it any longer, he said.

The representative then directed me to the company’s official blog post on the matter for more information. So after all that, we still don’t know how much Netflix pays.

Be sure to read that official blog post at Netflix. The 100-percent unanimity of the comments that follow is a rarity for the Web: everyone is pissed at Netflix.

Phil Villarreal, the film critic at the Arizona Daily Star, sees this move as a sneaky way for Netflix to drop blu-ray altogether:

[I]f you’re not entranced by 1080p it would be foolish to consent to the $4 tack-on. Upconverted DVDs look pretty damn good, after all, in 480p. I see this as a move by Netflix to get people to stop asking for Blu-rays and thus justify no longer having to carry them.

Could that be it? If Netflix wanted to eliminate its blu-ray, this does seem like one way to do it. But why would it want to do that in the first place?

What’s up with Netflix charging more for blu-ray rentals?

(If you have a suggestion for a QOTD, feel free to email me.)

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Tue, Apr 07, 2009 11:26am

I’m sure Netflix, like any other company right now, is just feeling the pinch of our downward economy. So why not charge a bit more for blu-ray. I accept their reasoning that it cost more to get than regular DVD.

Plus maybe this would mean that less people would opt-in for this plan and the people who have been waiting for a month for a single DVD wouldn’t wait so long.

Tue, Apr 07, 2009 11:28am

Well, I canceled my blu-ray access when they first increased the price to $1 extra. There just aren’t enough blu-rays available yet for the cost to be justified.

Even with the extra $4 or $9, though, NetFlix is still the best deal around if you like to rent movies.

Tue, Apr 07, 2009 12:55pm

I lean towards releases that are maybe a couple of years old on my queue, but probably about 28 out of 30 entries are Bluray. That said, I don’t like the extra charge. Also, since I was an early adopter of Netflix, I would get the 4-disc plan for the 3-disc plan charge. However, Netflix made sure to nail me for $4 instead of $3 on Bluray. :(

Ryan H
Ryan H
Tue, Apr 07, 2009 1:02pm

I think Netflix was pretty up-front with why they made the changes. Bly-ray moves were more popular than they expected. The demand was far higher than the number of copies that they had budgeted for, hence the long wait for titles. So the choice was to either continue with lone wait times on blu-ray or else increase the budget. They increased the budget. I’d expect the delays in getting blu-ray movies to basically go away within a few months.

Tue, Apr 07, 2009 1:34pm

You know, this doesn’t bother me at all. The discs cost more, and only a small subset of their users rent them. I rent almost exclusively Blu-Ray, never have long waits and will never go back to Blockbuster regardless of the pricing.

Tue, Apr 07, 2009 2:05pm

It’s probably as simple as the fact that blu-ray costs more. Costs more to buy, costs more to rent. That part makes sense.

Any extra charge should be on a per movie basis, though. The extra fees for the possibility of maybe getting a movie are insane.

Tue, Apr 07, 2009 5:34pm

I switched from Netflix when they first increased the Blu-ray price by $1.

Now I use VUDU to stream movies and I find it to be a decent service. Doesn’t cost that much and I don’t have to leave the house.

I find it ridiculous that Netflix keeps increasing these prices. I think they are trying to get rid of Blu-ray, personally.

Wed, Apr 08, 2009 3:44am

Looks like I picked the right week to cancel my membership.
I have never really agreed with the DVD-by-mail-in-a-big-red-“Hi, I’m a free DVD. Steal me, I’m yours!”-envelope scheme, but I gave it a go, then canceled my first membership years ago when my misgivings bore themselves out.
I signed up again this year after I got a TiVo and saw that Netflix offered streaming, but their stream-able inventory is incredibly lacking, and half the time the ones you can get don’t play properly, even over a fast connection, so I’m done with Netflix.