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kh

I wonder how long until they start inserting ads when you Watch Instantly?

Lamarr Wilson

I knew the Bluray premium was coming. Things are getting more expensive now that we have a "winner." I await to hear what this modest premium is and if it is reasonable, sure. Yes, we are used to paying more for HD, but not too much.

Brian

About 1/5 of my rentals are Blu-Ray rentals. I will not be intrested in paying a premium quite yet... especially since I have not been able to rent many of the Blu-Ray movies I want due to high demand/low availablity.

Dusty T

Well I do like Bluray movies, HOWEVER I barely ever get any in a timely fashion. For me to pay for the HD premium I would like there to be a better stock of titles. As for the watch now it is a good service and I would love to watch them on my tv. However that being said I believe I use hulu.com as much as I use netflix watch now if not more.

MCWHAMMER

I am sick to my stomach after hearing this Blu-ray premium crap. Pay a premium for movies they cannot send me? Why the f would I do that?

God Netflix, you're turning on your customers month by month. Don't do it.

danb

Based purely on speculation, I think that the HD premium will go to building their BR stock. It costs more to stock those titles, if they continue to charge the same amount for all subscribers then they'll either have to sacrifice stock quantities or charge subscribers who never rent those titles more. I think a modest increase is fair.

I love the thought of Watch Instantly, but in practice I've only used it once. I'm glad they aren't charging more for it. If they were I'd opt out.

Craig

The extra cost for Netflix to buy Blu-Ray discs should be subsidized by the entire customer base, not just by those who use it. Otherwise why not charge a premium to customers who rent Newly Released standard DVDs?...Or to people who use the website more (since they're using the Netflix servers and bandwidth more)?...Or to people who live close to the Shipping Centers and get better turnaround time? Those sound crazy, but it's the same thing as charging a premium for Blu-Ray...just another way for Netflix to nickel and dime us. The extra costs should all just be spread out into the subscription plans, or else it becomes plans within plans. New customers are going to Netflix now BECAUSE of the limited availability of Blu-Ray elsewhere, so Netflix is already making extra money off Blu-Ray. If they charge a premium for Blu-Ray, why not give a similar DISCOUNT to us if we mail back 2 discs in the same envelope, or refer a friend, or get a broken disc. Grrrr. Come on Netflix.

Tom

Watch Instantly is great, IMO, because a few crappy things I wanted to rent now won't need to go through the turnaround time. I hate that I have to use VMWare Fusion to use it, but oh well.

"Well I do like Bluray movies, HOWEVER I barely ever get any in a timely fashion. For me to pay for the HD premium I would like there to be a better stock of titles."

I agree -- Netflix needs to concentrate on getting better stock now ahead of the price increase. If you provide your customers with better service, they won't mind as much that they are paying an extra few bucks per month.

"Based purely on speculation, I think that the HD premium will go to building their BR stock."

I agree that the HD premium will go to building their Blu-Ray disc stock, but Netflix needs to concentrate on building this stock now ahead of any price increase while the percentage of Blu-Ray customers is still relatively low (compared to all customers).

"The extra cost for Netflix to buy Blu-Ray discs should be subsidized by the entire customer base, not just by those who use it."

The extra cost will be subsidized by the entire Blu-Ray base. Some in the base will only rent one Blu-Ray disc per month; a few will rent 10 or more Blu-Ray discs per month. Because Netflix should only have the marginal difference in cost for approximately 2-3 Blu-Ray discs on average per Blu-Ray customer per month, Netflix shouldn't have to raise the price of the 3-Out Plan above $20 per month IMHO.

Netflix customers will have gotten Blu-Ray discs at no additional cost (to the standard DVD plan) for almost two years before any price increase take effect.

Complication

I think an extra charge, within reason, would be good for people that want Blu-Ray. There are many people that are happy with DVDs but would rent Blu-Ray instead if there is no extra cost. These same people would signup for a Blu-Ray plan (except temporarily) which should reduce the demand for Blu-Ray discs. At present, Blu-Ray titles cost more so it makes sense that rental plans would cost extra. If the studios started charging the same (don't hold your breath) then that would be different.

@Craig

Netflix does not save on postage when you send 2 discs back in one envelope. They have a special deal with the USPS and pay for the postage to and from when the envelopes are printed. This way the USPS does not have to count the envelopes coming or going.

Complication

That should say "would NOT signup for a Blu-Ray plan".

leonardodicrapio

"About 1/5 of my rentals are Blu-Ray rentals. I will not be intrested in paying a premium quite yet"

So you paid probably about $500 for a Blu-Ray player, and your HDTV probably cost over $1,000. But you are already balking at paying an extra nominal fee per month for Blu-Ray -- for all you know it may just be $2-$3 more per month. Did you balk at the $10 per month charge your cable company wants for a HD converter box, too (and instead decide to just continue using the $5 per month SD box that they provide)?

germancity

I'd only want to be charged IF I rent a Blu-Ray, not just for the OPTION of renting them.

Ishtar

If they charge you more for BDs, then they have more money to buy more; charge more, buy more, pretty straightforward what they're trying to accomplish.

I rent BDs all the time and know full well how hard it can be to get some of them; hopefully this will help fix that.

skeptic

Re: the bluray premium

I don't buy the "added cost of disc" argument for the tiered pricing. The cost of a single disc must be a very small percentage of the cost of operation for Netflix, with shipping, labor, and warehousing being much more expensive. Compare say $10 extra to buy a BD over a DVD, with roughly $0.80 per round-trip of postage costs. That's just the cost of 12 more rentals, so the cost of procurement is surely a drop in the bucket compare to their ongoing expenses.

My view of the real reason for the premium is to reduce demand for BDs by pushing those not willing to pay to stick with traditional DVDs. This move isn't to "recoup the extra cost of inventory," but to shrink demand given the wave of new customers now that BD is the clear winner.

Just as consumers drop a load of money to buy a player/tv for the HD revolution, so too should Netflix decide to invest in their new inventory. They should pay up to modernize their inventory without charging extra to tiers of consumers. They'll get the money back in the long run even without charging the extra premiums.

another skeptic

Charing a monthly premium for blurays isn't a fair solution, especially for those that only rent one once in a while. How about this instead: bluray throttling.

For people that rent mostly DVDs with an occasional bluray disc, they would get a relatively high priority on getting BD titles.

For those that load up their queue with only bluray at the top could be throttled with lower priority. They would be shipped regular DVDs from lower in their queue and forced to wait longer for BDs.

This would encourage people to mix up their queues to match supply without unfairly punishing customers who want to occasionally watch a title that happens to be in BD.

eviltimes

Blu customers should pay a per disc premium to cover increased costs. For every BD shipped, NF should add the premium to your credit card.

Simple, easy to understand.

OddDuck

If a nominal increase will get me Blade Runner faster I'm all for it - that title's been at the top of my queue for almost four months (just gone from "very long wait" to "long wait").

kh

@OddDuck - If you're that interested in a certain title you could always buy it used on Amazon or Half.com then sell it when you're done, and if you're lucky it will cost you < $10 (just price it a few dollars under the lowest to sell it fast). Of course I understand that you pay for Netflix and probably feel that you shouldn't have to pay any more for DVDs.

someone

@eviltimes: what do you reckon the "per disc premium" is? Can't be more than a few pennies, tops?

Case study: Amazon is currently selling "300" on BD for $5.94 more than DVD. If a BD is sent out 120 times in the first two years, then it's less just 5 cents per person to make up the difference. If the surcharge is $0.05 per movie, that might be fair.

Laddy

I won't pay the premium since they seldom ship me a BD anyway. It's easier for me to use BBO to get either a BD or to exchange for one in store.

Aries

What a fantastic Idea! I can now pay a nice little fee while my Blue-ray movies rot on my cue for three months (Live free or Die Hard, Harry Potter, et all . . . ). Bollocks, Netprix.

Craig

I have a dream that some decade Netflix might actually have a movie SEARCH feature (not just a Search textbox) allowing me to find movies easily. For example: "Show me all Blu-Ray discs, that I haven't rated/rented, that are Action/Adventure or Thriller, that were originally released after 1995, and that a friend of mine rated 3 or more stars". If I could do a search like that, then I'd pay a freakin PREMIUM. Screw the stupid Blu-Ray premium, Netflix. I'll pay a SEARCH premium. Make your website useful and I'll shell out some more cash for you. Image how stupid Amazon or EBay would be with only a BROWSE option...crazy. Hey, but at least the Netflix website programmers made a new cool homepage. Whatever.

danb

Despite what Sony's marketing department wants to claim, it will be several years more before Blu-Ray is more than just a small minority. Meanwhile, the discs cost 25%+ more than traditional DVDs. This means that the cost per renter is far higher to procure the disc. Once that disc is purchased then the cost is the same as any other, until it's broken or lost.

Maintaining the BR (BD? what's the acronym here?) inventory IS more expensive. By increasing the plan price for those members they increase the profit margin on all of those discs, meaning that all of these complaints about the current service should go away. If they don't increase inventory they'll bleed Blu-Ray customers to Blockbuster.

Eventually, the BR subscriber base will grow and the acquisition costs will normalize to the point that they won't need to charge those subscribers more. At some point there will be a price increase that will bring other subscribers in line with BR subscribers.

The alternative is to raise everyone's rates right now. Given that BR subscribers are an insignificant minority when compared to non-BR subscribers, this doesn't make business sense. Why make a move that negatively impacts the bulk of your subscribers to make a minority happier with a service that they don't pay extra for?

This is different than customers who rent new releases, the majority of customers probably rent a few new releases, and they often have to wait instead of receiving them the Wednesday after release. It's different than Watch Instantly, which is offered for free purely to raise demand (Blu-Ray has its demand already), and as an initial step to what NF believes is its future. It's different than people who get fast turn-around time, they're smoothed (throttled) anyway.

Edward R Murrow

Aren't monopolies in a capitalistic society wonderful? They start bleeding you for a $1 here, $5 there and you're helpless to do anything about it.

It's not much when you look at your monthly bill, but if you multiply a potential $5 monthly charge per customer times 8 million customers then you're talking about some real money.

Perhaps Blockbuster is performing a public service by keeping Netflix slightly honest on increased fees?

Garblesnorf

Are we trying to troll by making more ludicrous statements again, Ed? Netflix clearly isn't a monopoly. They may be the industry leader, but they're not alone and they play in several different fields. You're free to take your business elsewhere. But since this announcement only affects the Blu-Ray adopters, I doubt Netflix will be making $5 * 8 million off of this move, much less will it likely offset all their costs of doing business. Not quite the greedy scheme you'd enjoy making it appear as, is it?

leonardodicrapio

"Aren't monopolies in a capitalistic society wonderful? They start bleeding you for a $1 here, $5 there and you're helpless to do anything about it."

Ed, since about 2002, Netflix's 3-Out Unlimited Plan (prices before adding tax rounded up a few cents to the nearest whole dollar) has gone from $20 to $22 (in 2004) to $18 (in 2005) to $17 (in 2007). So if Netflix adds $3 to the monthly cost for Blu-Ray customers only, they will be back to where they were in 2001. And the 2008 customers are getting Watch Now/Instantly service included in their monthly fee now, too.

If you want to see monopolistic pricing look at your cable bill (from that company Comcast that you can't help but drool over) or your utilities (i.e. water and/or electric).

Belgand

Know why they have such high numbers in the Bay Area? I have a few guesses.Aside from the obvious fact that they're local.

GreenCine used to be (and still sort-of is) a local company, but they were always smaller and didn't target the mainstream market like Netflix does. Recently they had a ton of problems with shipping and moved their shipping center to Van Nuys in Southern California. This means that people in the Bay Area who used to get DVDs with only one day of transit (put in the mail on Monday and you get a new disc on Wednesday) now have an extra day to contend with (ship on Monday, get a new disc on Friday) plus we had tons and tons of trouble for months while they switched. So I'm willing to bet that at least a portion of people did like I did and jumped ship... but that's only recent and a small number.

More likely is because, at least in San Francisco, video rental is terrible. There are, in all fairness, a few very good shops. Le Video, widely known in the city, isn't one of them though, yeah, they have a great selection, but in exchange you're paying $4 for one night (new release) or only three nights for others... with an automatic credit card charge of that same $4 for every day you're late.

Likewise, unlike in the suburbs, you have to contend with our terrible, miserable, public transit. If your favorite video shop isn't in your neighborhood prepare to enjoy what will likely be an hour-long trip just to get there... one-way. And as I said earlier, most neighborhoods don't have a shop even worth mentioning. Due to the high real-estate costs most local shops are unbearably small with a poor selection.

I'm incredibly picky about the films I watch and have to be in just the right mood, at the right time, to watch a film. For years I was spoiled with a great local shop that would order anything I requested that wasn't in stock, had almost everything I ever wanted, and only charged $2 for a 5-day rental. Yeah, their adult selection was pretty lackluster, but they had one and they bothered to update it. I realize now that I spoiled. Living in San Francisco though, Netflix (or the now diminished GreenCine if you can tolerate delays and the occasional other problems) is just about the only practical way to rent.

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