Netflix to hike up monthly Blu-ray fee by up to $8
On Monday, Netflix announced that the privilege to rent Blu-ray titles would be going up in price, beginning April 26. Citing the significant increase in the number of titles releasing on Blu-ray and the high cost of the discs over traditional DVDs, that comes out to a raise of anywhere from $1 to an additional $8 over what users were previously paying, for a total of $9 a month extra for its heavy renters.
According to the Official Netflix blog, it amounts to about an extra dollar per tier of the plan you're on, as opposed to the previous system, which simply tacked on an extra dollar. That amounts to:
1 DVD out at-a-time (2 DVDs a month)
Monthly plan cost: $4.99
Additional monthly charge for Blu-ray access on this plan: $1
Monthly plan cost with Blu-ray access: $5.991 DVD out at-a-time (Unlimited)
Monthly plan cost: $8.99
Additional monthly charge for Blu-ray access on this plan: $2
Monthly plan cost with Blu-ray access: $10.992 DVDs out at-a-time (Unlimited)
Monthly plan cost: $13.99
Additional monthly charge for Blu-ray access on this plan: $3
Monthly plan cost with Blu-ray access: $16.993 DVDs out at-a-time (Unlimited)
Monthly plan cost: $16.99
Additional monthly charge for Blu-ray access on this plan: $4
Monthly plan cost with Blu-ray access: $20.994 DVDs out at-a-time (Unlimited)
Monthly plan cost: $23.99
Additional monthly charge for Blu-ray access on this plan: $5
Monthly plan cost with Blu-ray access: $28.995 DVDs out at-a-time (Unlimited)
Monthly plan cost: $29.99
Additional monthly charge for Blu-ray access on this plan: $6
Monthly plan cost with Blu-ray access: $35.996 DVDs out at-a-time (Unlimited)
Monthly plan cost: $35.99
Additional monthly charge for Blu-ray access on this plan: $7
Monthly plan cost with Blu-ray access: $42.997 DVDs out at-a-time (Unlimited)
Monthly plan cost: $41.99
Additional monthly charge for Blu-ray access on this plan: $8
Monthly plan cost with Blu-ray access: $49.998 DVDs out at-a-time (Unlimited)
Monthly plan cost: $47.99
Additional monthly charge for Blu-ray access on this plan: $9
Monthly plan cost with Blu-ray access: $56.99
The move is sure to ruffle the feathers of longtime Netflix subscribers, who had already complained over the move to start charging an additional fee for Blu-ray rentals beginning last November. For its heavy users, those who are on the eight-DVDs-out-at-a-time plan, the $9 fee is equivalent to opening up a separate one-DVD-out-at-a-time plan.
The real question may be how much Netflix is actually having to pay for Blu-ray titles. Unfortunately, the company will not disclose what it pays for discs. A Netflix representative told me only that there was "not much, if any, discount" on most Blu-ray purchases."
That may be well and true, however, a large chunk of Netflix discs are printed exclusively for the company and differ from what's available at retail. Online retailer Amazon.com, which sells Blu-ray discs at a markedly lower price than what you'd find in brick-and-mortar stores, still has a $6 to $14 price differential, compared to each film's DVD counterpart.
The only problem with this math is that when you're Netflix, you can bargain down that price even lower because the films are being purchased directly from the publishers. That, and the company is buying up titles without packaging, something it's likely been doing exclusively since discontinuing its used DVD sales service last November.
So should users be footing the bill, in some cases up to $9 a month for what may be a nominal increase for Netflix's cost of operation? The only way Netflix may make it go down easier is by revealing exactly how much more it costs for it to purchase Blu-ray titles. On the plus side, with a bigger catalog of discs, this may cut down on some of the month-long waits some users (myself included) have suffered.
Josh Lowensohn writes for Webware.com, CNET's blog about Web applications and services. E-mail Josh, or follow him on Twitter at http://www.twitter.com/Josh. 
All in all Netflix is an awesome deal in my opinion. I pay less than $10 a month for unlimited streaming video and 1 in 1 out.
The only thing that doesn't make sense is your entire post, GotCobol.
I can get 1 bluray a month and have to pay 3 dollars, but I can stream to my hearts content 24/7 and not get charged a dime extra.
So you wait forever for the most current titles and get shipped foreign films and documentaries on plain old DVD while you wait for the titles that you really want to see.
I have played with Vudu before and I like the UI of the Vudu box and their library of SD content is slightly better than Netflix's streaming collection, but the price points seem relatively high for renting the HD content and unless you watch films relatively infrequently most people would be better off with Netflix.
If you were arguing that Vudu was better because their collection of stuff you could watch at the spur of the moment was better I would agree with you there, but I don't really see price as being Vudu's major selling point at all.
Factoring in turnaround I think this is comparable to having a 3 out at a time Netflix plan, if not better because of the lack of wait time and the movie are not listed as "Wait" or "Long wait"
but I guess if you already have a blue ray player you're an early adopter and have the extra bucks to shell out. i'll wait until there's enough titles that the rental prices of blu ray come down the same price as dvds.
Why can't Johnny do arithmetic? It is simply: Mommy and Daddy can't do arithmetic either!
When you go from $1 to $2 is that is NOT a 200% increase it is a 100% increase. A 100% increase means that the value is DOUBLED (ie. $1 to $2 is a 100% increase). A 200% increase would be another dollar($1 to $3) and a 300% increase is an increase from $1 to $4!
I SERIOUSLY hope that you DO NOT have any kids because that is 3-4th grade type math mistake! If you don't understand such basic math I am scared to think how much you have screwed up on more complex math (eg. exponential growth of interest). The vast math ignorance that people like yourself demonstrate is part of the reason why this country is in such a mess.
Try a shrink. Might help your very evident woes. You have many YOU problems.
BTW, you do realize that companies other than Sony make Blu-ray discs? Sony doesn't control the prices that other studios sell their discs for.
If you don't have a Blu-ray player how are you so confident that there is no difference? I will agree with you that there are some titles where the Blu-ray version may not be worth the premium, but that doesn't mean that Blu-ray is the same.
Finally, the contention that Blu-Ray discs are significantly more expensive than DVDs is only a half truth. Studios have reduced DVD prices in the past year or two because of declining sales and in an effort to push Blu-Ray. Still, many new release Blu-Ray films now cost what first run DVDs cost a few years ago: $20-$30 per title. Netflix was clearly profitable a few years ago with DVD prices at those levels, and they have been reaping the savings of declining DVD prices since. Thus it's a bit disingenuous to claim the extra costs are entirely "new"; I'm not convinced they're proportional either.
I suspect what's really happened here is that the studios have recognized Blu-Ray as an opportunity for pricing leverage with Netflix. They might have given too ambitious discounts for DVD bulk purchasing, and they've recognized the format transition as an opportunity to start charging Netflix something closer to retail prices. Moreover, they see Netflix's increasing market power and a threat from HD "Watch Now" to Blu-Ray profit margins. Remember, the distribution and production costs when shipping to Netflix are lower than those in a consumer sale (one destination, no packaging, no retailer in the mix), so the distribution cost savings vs. streaming are lower too.
Expect a more limited HD selection granted to "Watch Now" in order to push Netflix customers towards subscribing to the Blu-Ray service. This will drive up Blu-Ray sales numbers for the industry.
I've watched Netflix's streaming content and while it is decent it isn't the same as Blu-ray content. The bigger reason that Netflix hasn't been able to dramatically expand their catalog is because there is a lot of content that the media companies haven't licensed to anybody for online streaming yet! At lot of media companies have taken a slow uptake to license their content period (ie. you wouldn't see it on iTunes, Vudu, etc. either).
Your point about licensing is also well put. Still, I think the extra revenue coming from Blu-ray sales to Netflix will only be a further deterrent to media companies contemplating streaming. What's the incentive for streaming through Watch Now if they can guarantee greater revenue through Blu-Ray sales? Netflix only charges extra for the latter...for now.
I just downgraded my plan for 3 out with Blue Ray Access to 2 out with Blue Ray Access and it is actually $1 cheaper than my current 3-out plan.
Blockbuster had 3 at a time movies AND 3 in store movie OR game rentals for 15 or 16 bucks a month.
Then the prices went up and up and up and they started to remove items like free game or movie coupons from 3 to 2 to 1 to 0!
They started the "swap out a movie" for a movie program and it was awesome at first AND THEN it all went downhill fast. The free "swap out a movie for a movie" system fees appeared then it went down to 3 swaps a month, then it was removed entirely from the plan that I had.
After the plan was stripped down and the prices jacked way up they sent me an e-mail telling me that I was actually getting more now than I was before!
I sent them a screen cap with my old plan and bills showing my old plan and they talked to me like I was a moron for not agreeing with them.
Their customer service was AWFUL and I finally had enough and switched back to Netflix.
At least I'm not bitter about it...
Hopefully they will get flooded with calls and e-mails so this nonsense is reversed because I fear that this may just be the start of more price hikes.
So if you are unhappy with this CALL THEM! (which if you call the number they gave you in the e-mail you will not get in touch with them)
The real number is 1-866-716-0414.
I called earlier today and the CS rep did not disagree with my anger or defend Netflix at all, they know it's BS.
Netflix is evil and only wants your money. They will hook you with features then remove them or start charging for them. I NEVER GOT NEW RELEASES from Netflix, and they even hide new releases from their search. BB is almost ridiculous how often I get movies on the DAY OF RELEASE.
I had a lot of hopes for Netflix and hated BB, but 6 months on Netflix was a punishment and a waste of money. This move only proves they will do anything to charge you more.
Blockbuster is exactly why Netflix became successful. Blockbuster's corporate policy was to milk their customers for every penny they could. I mean why, not? It's not like there's any competition. People also grew tired of a store that had 1,000 copies of the latest Adam Sandler movie but no foreign/classic/cult//arthouse section. Besides, Blockbuster as it is now is nothing more than a direct ripoff of Netflix. They're just copying their business model.
But Netflix is wrong to not reveal the difference in price. I really think it won't justify the difference. Blu-ray discs are more scratch-resistant and should have longer service lives than DVDs. The increase is way too much. I'm seriously thinking of downgrading from three a month to two a month, but that only saves a buck.
If I was the person who came up with this at Netflix- I'd be looking for a job.
If HD DVD won we wouldn't have this issue.
if what I have read and my own experience, this increase may in actuality be due to extreme losses of disks to cracking in their shipping process, not to increase disk supply.
And when it comes to the physical cost of printing the media itself, I'm sure it's pennies. Sure, the licensing and equipment and all that jazz costs money, but in the end, the product is just some plastic and metal. It'll eventually even out. I've seen BR sales for $9+. Yeah, they're old or unpopular movies, but considering there's normal DVDs selling for $20-25 still, obviously it's not all about the manufacturing cost.
As to the 'All the equipment to make the discs is licensed from Sony!'..... BZZT! WRONG! The technology ITSELF is licensed from Sony with the rights to USE the technology. The actual equipment to press Blu-Ray discs is NOT made by Sony itself, but by many smaller manufacturers using a template given to them by Sony.
But all the money flows to Sony.
- by open-mind March 30, 2009 9:49 PM PDT
- Seems like Netflix should be offering something ... anything ... in exchange for the price increase. Like maybe an extra bonus CD out. Also, shouldn't economy of scale start making Blu-Ray cheaper at some point? Or is the cost of Netflix just gonna keep going up up up as Blu-Ray spreads?
- Reply to this comment
-
Showing 1 of 2 pages (85 Comments)I really don't need 3 disks at a time, so at the end of April I'll probably drop my account back to 2 at a time.