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Netflix to Jack Up Prices For Blu-ray Renters

What's the best way to punish the same early adopter customers that helped make your service a success in the first place? If you're Netflix, it's charging them extra for renting Blu-ray. CEO Reed Hastings justifies this action by saying "consumers are used to paying more for high-definition," basically punching this next generation of early adopters in the nads for doing what they love to do.

We're not sure how many Blu-ray rentals you need to have before you qualify for the higher-priced membership (or if you need to pay up before you even rent one), but this is undoubtedly a limited time deal. We can't imagine Netflix will keep charging people more once 25-50% of their customer base starts renting Blu-ray movies.

Will Blockbuster follow? We hope not. For their sake as much as ours. [Alley Insider via Marketwatch via CNET]

8:15 PM on Mon Apr 21 2008
By Jason Chen
23,482 views
79 comments

Comments

  • ohh and you want that in digital surround sound, that'll be extra...

  • Image of Kaiser-Machead Kaiser-Machead at 08:38 PM on 04/21/08 *

    You bring the cases of HD DVD on MY city steps. You insult my deals, you threaten my service with slavery and death! Oh I've chosen my prices carefully subscriber, perhaps you should've done the same.

  • I don't blame them one bit for charging more to rent Blu-ray titles - until the cost of purchasing and licensing those titles comes down they are well within their rights to ask customers to pony up more, early adopters or not.

  • I hope -IF- this happens, its in the form of a small per-disc fee. Otherwise there will be a major backlash for netflix to deal with, which could end in an increase in all plans.

  • @legacye: oh good, defend them because they "can" charge more.. they gouge us for tech they can produce and distribute for not much more than a DVD costs.. thanks.. that's helping

  • They better learn fast and NOT implement this bullshit idea...that is why we love them (currently) they don't pull this bull like BlockBuster or you will lose a Lifetime Netflix subscriber. I have been there since the beginning almost and would leave you faster than a "First" poster on Banhammer Monday.

  • That sucks.. but who didn't see this coming? I don't mind paying a little bit more as long as shipping times are improved.

  • I am currently involved in a "case competition" on NetFlix. Basically it's a researched presentation about strategic options for making more moolah. I think it's kinda rediculous that you'd suck Apple's nuts over the iPhone, (still mostly just a phone that costs a hell of a lot more than a phone) and bitch about paying more for high def movies. I mean, didn't dvd's cost a hell of a lot more than VHS at first? Didn't CD's cost an arm and a leg? It's called product life cycle. Learn it. Know it. Love it. Live it. Buy it. Rent it.

  • Used to paying more? No no wait a sec. I havent bought a movie in HD since HD-DVD went belly up. Why?

    Well its simple really. Prices on blu-ray movies has gone up. Target used to sell new releases for about $20-$25, now that are $30-$35. Sorry thats too much. Even more so when you consider most blu-ray movies still arent using the superior VC-1 codec that 90% of HD-DVD's used.

    If I buy a hd movie now its going to be a clearance HD-DVD. Until blu-ray movies hit $20 average they can keep their money and if Netflix wants to charge me more not only will I stop renting (blu-ray) but I will drop my 5 disk plan down to 3 out of spite.

  • Image of weatherman weatherman at 09:12 PM on 04/21/08 *

    @killarclown: no, actually he's defending because they have to pay more. WHen you're running a business and it's 25% more to serve your customers you have to find a way to either absorb those costs or pass them along. You can't absorb them for too long before you start jeopardizing the entire business.

    I've been a loyal Netflix customer for many years. In that time they've increased shipping times and increased then decreased the price. They added free streaming services that I thoroughly enjoy. I can't begrudge them if they feel that they have to pass along an added cost to just those that are actually using it - otherwise they'd be passing on the cost to all of the customers including me.

    That said, I don't think it's the right business choice. BR adopters should be flocking to Netflix in this borderline recession economy as they try to maximize the value of their home entertainment budget. Not everyone who has a BR player is going to just pony up a couple of bucks for the service. In the long run I think Netflix would be better served by taking a bit of a hit now in exchange for reaching a broader audience.

  • Total BS, you can't tell me that Netflix is experiencing any type of loss because of Blu-Ray. I've been on Netflix a while now and get plenty of Blu-Ray titles for my $15 a month fee. Now they want to start charging me a premium for the HD titles I've been getting for the standard fee? This is why I left Hollywood Video, they took HD disks off their "all you can eat" program. I don't care how you slice it, it just ends up being what we are seeing way too much of, corporate greed. "Why make a hundred-million dollars, when we can make a hundred-....BILLION?"

  • they have us by the baaallls,
    may have to go back to blockbuster,
    at one time i thought netflix had more blu-rays
    than blockbusters but the wait for some movies
    is " very long, long, long, long, long, long, wait"

  • I won't be paying more for Bluray rentals and I'd certainly consider going over to Blockbuster if they decide not to charge more for bluray. It's just not worth it. Bluray only looks a little better than an upscaled regular DVD and I actually get less functionality out of a Bluray DVD right now. I can't play it in my bedroom where I only have a regular DVD player. I can't take it on a trip or to work to play on my laptop because again there's no Bluray option for my laptop.

    Now I'd pay more for a steaming service to my mac or ps3, but not for Blurays that only look a little bit better and only play on 1/3 of my players.

  • Heheh! The picture is awesome! That movie is great on Blu-Ray!

  • Well I guess thats another reason to hold off on the Blu-ray player purchase.

  • Recently got a PS3 and rented some Blu-ray movies from Netflix. I gotta say, the quality wasn't that much better than an upscaled DVD. (I have a 50" plasma.) If the surcharge is nominal, say, $2 a month or $0.50 a disc, that's ok. But otherwise, I'll just go back to standard definition. But that's a personal call and it's ok with me that Netflix is going to surcharge for enhanced products. You can blame Sony et al for the increased costs of the Blu-ray movies. The surcharge may also help cut down the wait times by either funding the purchase of additional discs or discouraging people from renting them.

    What is it about the Internet that makes everyone feel like they should get something for free? They are delivering the latest form of entertainment right to your door. Pay the man a dollar!

  • Well since people are used to paying more for Blu-Ray, give them what they expect instead of being the exception to the rule, right?

    ...wrong on so many levels. -_-

  • @Seiven:

    Giz has a Banhammer Monday?

  • they can charge more now because there's no choice.

  • @killarclown:
    Unfortunately, Netflix doesn't get to buy dics for the same price that it costs to produce them. In fact, if movie studios could have it their way, they would either charge them 10x's more then they currently do, or put Netflix out of business.

  • Is Netflix no better than the fat shirtless mailbox dvd thief now?

  • @bandit: "I gotta say, the quality wasn't that much better than an upscaled DVD."

    Seriously? Ive seen Blu-Ray and its no where near the same quality as an upscale dvd. You sure you got the right hookups?

  • They are just hoping to get someone else to pay for their transition.

    I'm not going to pay extra.

    When BD hits the mass market Netflix will be in trouble if Blockbuster has BD and they don't.

  • I could go back to standard dvd or i could just go back to using blockbuster. Whew that was an easy choice, i like going to the store anyways, most the time when i rent movies its on impulse.

  • @albokay: Yes, I'm using HDMI right to the Panny. My upscaling DVD player (Sony, BTW) is pretty good. But maybe I just didn't pick a good movie. I watched I Am Legend and Enchanted. I'm not saying I didn't notice *any* difference, but on a 50" at about 11-foot viewing distance, it didn't make me feel like going back to DVDs (such as the discs that came later) was a big loss. Any recommendations for the best-looking Blu-ray disc?

  • I love how rational and well-thought out the comments on Gizmodo are.

    BluRay discs probably cost Netflix 25% more to buy and license, you're really going to get THAT indignant over them trying to assuage some of that cost through the customer?

    They've shown themselves to be a very good company as far as treating their customers well, it sure doesn't take a lot of you idiots much to turn on a company.

  • @bandit: I've seen Casino Royale at a store and it looked awesome. POTC, Spiderman-3 and Ratatouille looked phenomenal as well. Granted the display at a store was a $3000+ Sony with 120Hz refresh rates, etc.

  • @Techguy1138: "If" Blu-ray hits the mass market I'm sure Netflix will adjust. They're not just going to sit there and watch Blockbuster take their money. Also, what makes you think Blockbuster won't do the same thing?

    The reason Netflix didn't raise prices earlier was due to the format war. Same thing is happening to the player prices. Have you seen them go down in price? No, I haven't either.

    Do a search on a Gizmodo article about how manufacturers have to recoup the money lost on the format war. Very good read.

  • I left Blockbuster after getting my Blu-Ray player because they had no Blu-Ray in the local stores. Was just about ready to join Netflix but now Blockbuster is putting a Blu-Ray selection in every store and Netflix is raising their price. I'll be waiting to see if this rumor is true.

    Seems like an odd move by Netflix during a recession.

  • this is an outrage... I'm not happy about it, but i'll probably still pay for it. I always liked netflix becasue they're the only company who's actually reduced my subscription price by a dollar, AND switched to unlimited online viewing after only having limited time per month. Now they go and do this though? something doesn't add up...

  • I'll be dropping Netflix the moment they implement this change. It would be one thing for them to say that it's costing them more but to come out and say they are jsut doing it because Bluray adopters are accustomed to paying more for it, then thats total garbage.

    I'm not that in love with Netflix.

  • that's it, i'm going to switch to torrents, screw all companies.

  • There's only one solution to this HD madness. Stick to DVD.

  • "Well its simple really. Prices on blu-ray movies has gone up. Target used to sell new releases for about $20-$25, now that are $30-$35."

    You actually think Netflix pays full retail price for their disks. LOL!

  • ironicly most of you have no problem forking out the extra montly fee to your cable/sat company for HD content.

    I don't like it, but I do see their side.

  • @ripfire4: "There's only one solution to this HD madness. Stick to DVD."

    +1

  • "You have to be kidding me" ... "Used to paying more"? The prices are redicilous and why I haven't purchased any hidef movies at yah, double the price of a regular dvd, who sets these prices anyway? man, I so wish apple or ms had a per month fee for there movie service, I'd drop netflix so I could just download them online.

  • @Milstar: The difference is that my cable company told me up front that HD content was going to cost more. When I enabled Blu-Ray on my Netflix account, there was (and there still is) no indication that my subscription fee would increase. They already offer Blu-Ray as a free option. It's too late to start charging for it.

    Not to mention that launching their streaming service must have meant a huge investment for them, but they don't charge extra for that either. I don't see why Blu-Ray should be any different. New services bring new customers, and more customers mean more profit from the margins.

    @bobman1235: no u

  • Looks like I'm going to stop renting BR disks for a while. DVD Upscaling is good enough for me.

    Besides, I'm trying to cut back on my spending so my wife and I can adopt a kid. I might actually cancel Netflix anyways since that's another 20bucks a month that can go to the new kid...

  • I love it. A true monopoly in the works.

    Can't wait until HD broadband downloads change everything. Again.

  • A few of you raised the excellent point that the cable company charges a hell of a lot more for HD content that I often don't watch. Bugs mating and stuff like that. Occasional sporting event. At least with Netflix, you're renting discs you want to see, each time. I'm really having a hard time understanding why so many of you expect access to the new technology at the same price. It's nice (and probably a mistake) that they rolled out Blu-ray to existing customers for no extra charge. Until we know what the charge is and how the opt-out works, I don't understand the posts about "outrage" etc. And if the charge lets them bulk up on discs to reduce the wait time, that's great. Chill, people. If Blockbuster works better for you, go there.

  • Image of johnnyabnormal johnnyabnormal at 11:56 PM on 04/21/08 *

    @jkr: I wish you could torrent gasoline.

  • @SgtBeavis: Netflix vs. new kid: I'd pick Netflix.

    I'm kidding, of course. I have three kids AND Netflix.

  • Boohoo, suck it up and either pay the money or not. You complaining about it isn't going to make netflix change their policy and pricing. What will, however, is people leaving for other subscription services.

  • Justifiable or not, the price increase is going to cause a lot of ill will towards Netflix. They may be figuring that the revenue they'll get will offset all the lost customers, but somehow I doubt it.

    I think the ones who need to take action here are the studios and hardware manufacturers--they should encourage Netflix NOT to raise prices, if they want more of the public to adopt BD.

  • nads is the stuff to remove hair from your legs.
    gnads are the things with hair b/w your legs.

  • After a 1.5 years of HD here's my synopsys:
    Movies that are made for HD(Matrix, 2001, 300, planet earth) are worth the upgrade but everything else it dosen't matter and a good upconverter will do a great job. So I would buy those movies in HD but would buy the dvd of Juno or 40 Year Old Virgin unless they were the same price as HD.
    $5 for DVD's is a good price and maybe $8 for a bluray. Any more is a rip unless you really need to watch the movie 10+times.
    I just say Juno in Bluray and have to say it still sucks compared the HD-DVD. It has this weird graneyness about it. Not super sharp.
    And If you're wondering I have a 17" and 26" 720p, and a 50", 56" and 125" 1080p TV's. I've had a PS3 and 2 HD-DVD players and every thing else in between for over a year.
    So I wouldn't pay extra and just buy the few movies that look good in HD.
    Just my 2 cents.







  • They should be happy I'm renting BDs. When I rent DVDs I immediately rip them to my computer and usually drop them in the mail the same day I get them. With BDs, I actually have to keep the disc for a day or so. So, BDs I avg 3 a week, DVDs 6 a week. They would save quite a bit on shipping if they shipped me more BDs.

    And yes, amazingly enough I do actually delete the rips after I watch them.

  • @Gofastmazda: Your posts are consistently idiotic. And your car is probably slow.

  • @ithcy: Good point that launching the Netflix streaming service must have meant a huge investment for them. Maybe they should charge Windows users a premium as Mac users don't use (can't use) that expensive service.

  • @fastm3driver: Dude! 125" TV?

  • @dry-roasted-peanuts:
    Do you really think they care if you copy them or not? Does it really matter to them how much you rent in a week? I mean, in the end, you still pay the same amount.

  • @dry-roasted-peanuts: "...amazingly enough I do actually delete the rips after I watch them."

    Cool. I'm glad I'm not the only one that deletes rips after watching them. Not every movie deserves space on a hard drive.

  • I signed up with netflix because of the blue rays. Yeah they might cost a little more but a majority of the people just plain don't like price hikes. Movies are not a necessity so they will be easy to dump for most people, probably me too. Especially with the way the economy is lately i think lots of people won't mind saving the 20 bucks a month.

  • Kind of like... "consumers are used to paying more for... ...gasoline..."

    Yeah, those people are assholes to, Mr. Hastings...

  • Part of what makes this idea so unpalatable is the variability in monthly charges, since I don't know how many of my rentals will be BDs and how many will be DVDs. So some months, when more BDs come my way, I'll pay more, and that makes budgeting a little more complicated. I like the fact that I know how much I'm going to be charged by Netflix every month. Variable budgeting sucks.

    Of course, the main thing is that my dollar is already so stretched thin in this economy that such a move will guarantee I drop from the max. 8-out unlimited plan to perhaps the 5-out umlimited, or maybe back to the old 3-out unlimited plan.