Netflix to Test Blu-ray Price Increase

Netflix CEO Reed Hastings said that Netflix would begin testing a Blu-ray price increase "very shortly." He also said that a small percentage of users ("low single digits") currently rent Blu-ray titles, but they expect that to increase this year with the introduction of low-cost Blu-ray players during the holiday season.

What do you think is a fair premium for Blu-ray titles?

Comments

[kh]

The cost to Netflix for Blu-Ray titles may actually be more than standard titles, so it makes sense to charge a little more. But I fail to see why a Blu-Ray title should cost significantly more in the first place, except for the obvious - studios simply decide to charge more.

[aa]

I don't use watch instantly, but I rent Blu-Ray titles. Can I get a discount for not using watch instantly? I am sure netflix spends more money on that than the small premium on Blu-ray titles. If netflix increases the price, I will just switch to BB!

[dAVe]

It will be interesting to see if BB follows suit. Right now they don't charge more for Blu-Ray movies at their stores or from their online service. Also, back in the 90's, I wonder if the DVD format would have been accepted so quickly if there had been a rental up-charge over VHS. At least consumers didn't have to change out the TV as well as the player.

[Jay]

Increase blu-ray fees? Hah! I have had a ton of BDs at the top of my queue, and haven't received one in MONTHS. If they start guaranteeing them to be in-stock...maybe. But at the same service level as today? Guess I would have less of a need for a subscription....

[OdomZ]

So you are going to go to BB if Netflix raises prices for Blu-Ray. Doesn't BB already charge more??? Blu-Ray discs break twice as much and cost 6-10 bucks more. If you are using Blu-Ray you should pay a little bit more. Instant Watch is free for all members-- not everyone can use it. Not everyone has high speed internet or a PC or even wants to use it.

[danb]

I think NF should also add a charge for each additional profile if profile users (like me) are such a hassle.

[.......]

To AA:

I don't think you should get a discount since they are not really charging you for IW, but they will be charging you for BR because you ARE using that.

[BRDSteve]

I have both Blue-Ray and regular DVD's in my queue. Whether I receive a blue-ray disc obviously depends on if its available on blue-ray and what actually gets sent. So my monthly fee will increase based solely on the fact that I have the potential to receive a blue-ray disc? What if an entire month passes and I don't actually receive a blue-ray disc? How about a small additional fee added on each time a blue-ray disc is actually shipped instead?

[nipsey russell]

as said before the percentage of discs in my Q that area available is in the single digits (i think it was 6% last time i checked) - so no, i dont think an increase of more than a few pennies is fair at all. But if they want to charge people who use profile more....or those who use watch it now....or those who turn over movies faster.....etc etc etc

[nipsey russell]

as said before the percentage of discs in my Q that area available is in the single digits (i think it was 6% last time i checked) - so no, i dont think an increase of more than a few pennies is fair at all. But if they want to charge people who use profile more....or those who use watch it now....or those who turn over movies faster.....etc etc etc

[James Joaquim]

I would be willing to pay more for BD's but currently I stopped getting Blu from Netflix because most of the discs I receive are cracked and unplayable.

[David Grenier]

It depends on if they are planning to charge extra for each blu-ray disc you rent (say a 10 cent surcharge added to your next bill) or if they are planning on creating a new "Netflix HD" pricing level where you pay $2-3 extra a month for the ABILITY to rent Blu-Ray movies (which should mean that any time a blu-ray version of a movie is available, that's whats put on your queue automatically).

The first is probably more fair. I might want to watch the newest Batman movie in BluRay when it comes out, but 99% of the rest of my queue might be old movies that don't exist in the format. I shouldn't be paying extra every month because a few times a year I watch a blu-ray disc.

In the end, though, I think any such move will cause more problems than it will solve.

[Jeff from Knowzy]

Pressing Blu-ray discs requires a new manufacturing process and equipment, so I understand that the cost must be re-couped in higher prices for Blu-ray titles.

However, is the industry saying that a few years from now, the price of Blu-ray titles will not come down? I don't think the mass market will accept paying $30 - $40 for a movie.

Will Netflix remove the Blu-ray premium when there's no longer a premium at the retail level?

[Eric]

Just an easy way to justify inflation. If only I could think of something as clever to tell my boss, so's I can get a raise...

[danb]

I don't see Blu-Ray ever falling below $20 for new releases. If you look at the entertainment industry you'll see a history of incremental price increases when new formats are adopted. What NetFlix is far more likely to do is eventually raise non-BR accounts to match the price of BR accounts.

[Gir]

What a mess.

A blu-ray service really should stand on its own, but there probably aren't enough titles to keep anyone's queue full. No one would stay with a service where they can only find two titles a month that they even want.

But mixing it in with the DVD rental service is a recipe for drastically changing service levels. 2 blu-ray disks this month, then 2 months without - that's really no better - certainly not worth an additional charge.

Give it up. If blu-ray is hitting the bottom line too much, just do a modest price increase (50¢) across the board, for everyone.

One availability and title count increases, you can enhance profiles so a person can set up a blu-ray only profile and charge a premium for it. But you can't do it till there are enough titles to support at least a dedicated 1-out profile, and availability has to be good enough that the profile cycles fairly quickly.

[andyg8180]

i love getting blu-rays... but considering they are always "long wait" and "very long wait" i shouldnt really have to pay a premium for something that i had to wait 2 months to get... still waiting on rambo lol...

Now, if i only had to wait a week at the most for a blu, then maybe i wouldnt mind a couple cent increase...

But how will they charge for blu-rays if you maybe get 2-4 blu's a month?

[treycranson]

For the few who say that IW doesn't cost anything, so why discount. Nothing is free. IW is built into the price of the membership. Just because you don't see it doesn't mean it's not there. I think a modest increase of no more than a dollar would be acceptable only if they start using that money to increase their level of service.

[kh]

OK, I guess I'll state the obvious - they want you to use "watch instantly" because it will save them money on postage and handling (eventually, anyway), so if they charged for it (or discounted non-users), they wouldn't be encouraging it's use. Blu-ray, on the other hand, costs them money.

[LG]

If they raised the price for Blu Ray, I would simply turn off the option in all likelihood.

I don't really notice enough of a difference between an upscaled DVD and Blu-Ray for the visual quality to matter me. Likewise, I only have a 5.1 sound set-up, so 7.1 surround sound isn't a factor either.

Mainly, the difference would be in the extras and, so far, I haven't found the Blu Ray extras to be especially compelling over the DVD versions in most cases.

Also - Netflix would have to get much, much better about availability of titles and quick turn around of Blu Ray titles than they have been in the past.

If they did, and the price increase was small, was very small, I *might* pay an extra dollar a month max for Blu-Ray, but I certainly wouldn't pay any significant increase.

And - I'd certainly expect the price to drop once Blu Ray mainstreams.

To be honest, I'd be very leery of any price increase right now.

Netflix would be better off not rocking the boat right now.

[Will]

I can't decide on this until Netflix reveals what they pay for a DVD, and what they pay for a BluRay disc. Assuming they get a bundle deal, and no packaging, I'm sure they don't pay the $20+ that real people pay for BluRay movies in stores.

Some BluRay films like Underworld or Hellboy are often on sale for $15, so it seem likely that Netflix's cost is probably something approaching $10 per BluRay disc. But without the details, it is only speculation.

My sentiment is that they can't really start micromanaging products like this without pissing people off.

[CJ]

Been renting Blu-ray discs from NF and BB for about 18 months now. Frankly, unless it has lots of CGI or great action scenes, the upscaled standard DVD picture resolution on my PS3 is perfectly fine - Blu-ray doesn't add much. It's all hype folks.

Also Blu-ray titles are now starting to come with bizarre audio, such as DTS HD MS 7.1 as an example, and that's the only English language audio track available. So people like me, who have plain old DD 5.1 amps get to listen to those titles in plain old stereo. And that's while the standard DVD for those titles has DD 5.1 or DTS 5.1 as a choice. Very irritating.

I'll bail from NF Blu-ray rentals if they charge a monthly premium just for privilege of renting any Blu-ray discs. I'll just get them on my BBTA plan at same price as standard DVDs. If the premium is priced on a per rental disc basis, then I might consider it for those few titles where Blu-ray makes a difference.

In my opinion, Blu-ray is not going to catch on - It's a day late (with titles) and a few dollars to much (for players). And moves like NF is contemplating will surely not help establish a market, nor more importantly, sell the players.

[Scooby]

"unless it has lots of CGI or great action scenes, the upscaled standard DVD picture resolution on my PS3 is perfectly fine - Blu-ray doesn't add much. It's all hype folks."

High def adds a lot of detail and depth to the picture. Your display's probably not calibrated correctly if you can't tell much of a difference. High def is not hype. Even my partner, who's no videophile, is now disappointed if the week-end movie from Netflix is not HD.

$2.00 per month sounds good to me.

[CS]

I just wish they would make watch instantly available for Mac. I've been paying for Netflix and not getting that added value. Now I'll have to pay more for Blu-ray? They really should make Watch Instantly for Mac before any Blu-ray price increase.

[leonardodicrapio]

$1 per disc out per month capped at $3 per month. I paid $19.99 per month for a 3-out plan Netflix plan about five years ago (and Netflix bumped that plan up to $21.99 per month, I believe -- I believe I ended up downgrading to 2-Out a month for $14.99 per month at the time, though).

BTW, I hear more of a difference from Blu-Ray than what I see (I admittedly "only" have a 42" Panasonic non-1080p Plasma, and I sit far enough away from the set that I really don't need 1080p).

[Scott]

I think the keyword is "test". A lot of people seem to think Netflix is out to get them, when in all seriousness they know that isn't true. Netflix is going to test different price points to see what works best, they aren't going to arbitrarily apply a huge fee with no regard to customer outcry.

[Gir]

One wonders how they're going to test it though. Are they going to choose some unfortunate few existing blu-ray opt-ins, start charging them more, and see how many opt-out at each price point? Are the going spring it on some (or all) new opt-ins and see how many decline? Are they going to disable the current opt-in (grandfathering existing opt-ins) and send out 'upgrade to blu-ray now for $xx' e-mails? Will they only send out questionnaires?

How exactly do you test pricing on a service while continuing to provide it for free?

[Craig]

Netflix has a bunch of "features" that cost them money, and most of them are not used by every customer, such as:
- Watch Instantly
- Profiles
- New Releases
- A new distribution center in some city
- etc.
Rather than charging each group of customers who use these "features" an additional surcharge [for each feature], Netflix instead takes all their expenses and averages them out across all their customers, and everyone pays the same amount.

The same is true for people on the same plan who rent different quantities. If customer A is on the 3-out plan and rents 22 movies a month, and customer B is also on the 3-out plan and rents 11 movies per month, they still pay the same amount. The expense from one customer is averaged out with the other customers.

So along comes Blu-Ray. Why decide to charge more for just this and not for the other "features" listed above?? I don't mind if Netflix charges more, but they should be CONSISTANT. Either have one base fee structure like it currently is, or go entirely ala-carte and let me pick which extra features [and associated fees] I want to ADD to my account, such as Watch Instantly, Profiles, New Releases, Blu-Ray, etc.

Inconsistent pricing shows either a screwed up business plan or poor execution...or both.

[Vince]

I usually always keep Blu-Ray disks considerably longer than I keep DVDs, so ultimately it costs Netflix less to send me a Blu-Ray, since postage fees are what really hurts their bottom line.

[leonardodicrapio]

Most of the comments I see on this blog (admittedly not enough to really provide ANY kind of consensus of what Blu-Ray members at large think), is that about a dozen people think that it shouldn't cost them anymore than a DVD-only subscriber. This same dozen people also say they don't see any (or very little) difference between DVD and Blu-Ray, anyways.

Then there seems to be about another (different) dozen people who are willing to pay between $1 and $3 per month for Blu-Ray, and they do see a benefit to Blu-Ray. I will also say being in the second dozen people who put a dollar value on Blu-Ray rentals that I would hope that Netflix does institute a price increase, so the free-loaders with bad vision/hearing don't seem to appreciate Blu-Ray, anyways. I'd rather pay a few bucks more and have better availability of Blu-Ray movies.

[Craig]

When a popular new release comes out, Netflix buys 150,000 or 200,000 copies of the SAME movie, since everyone adds it to their queue and wants it the day it comes out.

If Netflix offered discounts to customers who were willing to wait 2 weeks and 4 weeks and 6 weeks to get new releases, then they wouldn't need to buy so many copies of each movie. And that would save Netflix tons of money.

Why not implement a pricing discount like this, especially for Blu-Ray. Netflix wants to start charging a Blu-Ray premium because they say they need more money to buy Blu-Ray discs, but instead why don't they just come up with a discount structure to keep from having to buy so many discs in the first place?

Seems too logical, right? Right. It makes me think Netflix is going to spend the "Blu-Ray premium" money on something else, or else they'd pursue discounts before charging premiums.

Scenario: If I need more money so that I can go out and get drunk every weekend, maybe I should just stop going out every weekend. Money isn't my biggest problem. But hey, if I could get someone to give me more money then I could keep going out, hell, I could buy a new car then too. :-)

[Steve]

"...Blu-ray doesn't add much. It's all hype folks."

Then you must have very low-end equipment or its setup incorrectly or both.

[Captain Celluloid]

ZERO -- that's what I think is appropriate for a BLU RAY rental increase. To single out BR, or ANY disc for ANY reason, for a increase is arbitrary and it is not reasonable and it's not fair. . . . and it's not the business plan you promised, Mr Hastings. I'm happy to have NETFLIX make a fair profit but it must be a FAIR profit. Let's think it thru -- if a rental increase is accepted by subscribers on one type of disc there could likely be other increases.
Where will it stop? -- A premium on CRITERION releases? They're usually more expensive than Blu-Ray. -- A premium on OBSCURE titles that few people rent? A premium on NEW releases? --
-- a premium on OLD FILMS, on FOREIGN FILMS
WHERE WOULD IT END? Sorry Mr Hastings; You can't change your own rules. You originally touted NETFLIX as a place where all tastes in discs would be accommodated without additional charge AND THAT IS WHAT YOU MUST STICK WITH . . PERIOD.
If you want to increase the cost of something
HOW ABOUT INCREASING THE COST OF DOWNLOADS.
At present your downloads are of hideous quality and a waste of bandwidth . . . BANDWIDTH THAT WE ALL HAVE TO PAY FOR.
You are welcome to experiment all you want with downloading BUT I FOR ONE DO NOT CARE TO PAY FOR YOUR EXPERIMENTS.

[Quiet Desperation]

Oh... I'd cough up an extra buck a month, I suppose. Maybe $2, but I'd think about it longer.

Shoot, I was Real Close to getting a PS3 for Blu-Raying, too. I needed it to complete my nextgen triumvirate of XBox360, Wii and PS3.

[leonardodicrapio]

"Where will it stop? -- A premium on CRITERION releases? They're usually more expensive than Blu-Ray."

Kaptain Koolaid,

I wasn't aware that Netflix carried ANY Criterion releases. A quick search I did revealed 358 matches, but it looks the first one is the only Criterion Collection disc:

"The Killers: Criterion Collection(1946) UR

Ernest Hemingway's short story 'The Killers' was turned into two memorable films that bookended the high period of the noir genre. Disc 1 contains the original 1946 Robert Siodmak version starring ... Read More"

I just hope with this price hike Netflix bumps up their Blu-ray inventory so that we don't have to wait months to get new releases on Blu-ray.

I don't mind paying few extra bucks a month as long as they have the movie you want on Blu-ray in reasanable time.

[sl]

No way. Should be one of the differentiators vs. their competition. Netflix already profits from people who only rent a few movies per month.

[ViewerNearYou]

No! Please no... Stock less if you have to, but as it is you need to be a huge premium for a set worth watching high def discs, then you've got to spend the bucks for a player (or a Playstation 3), and then add a recurring upcharge for Netflix? Count me as not a fan. I'd rather see "Short Wait" more often.
Besides, if the player prices are coming down than the media prices should follow suit.

[ViewerNearYou]

PS Another alternative I'd be happier with is going back to a limited # of hours model on the watch instantly portion of the service. Surely the all-you-can-eat model must cost the company big bucks for bandwidth and server resources.