Netflix to raise rates for Blu-ray
High-def discs get $1 a month surcharge; Mac-streaming plans underway
By Danny King -- Video Business, 10/8/2008
OCT. 8 | Netflix next month will raise subscriber rates for customers who want access to Blu-ray discs by $1 a month, the company said this week. Netflix, which began testing such pricing increases in August, also plans to make its video-streaming service available to owners of Apple's Macintosh personal computers by the end of the year.
The largest U.S. movie-rental service via mail will start charging the extra $1 a month for its 800 Blu-ray titles on Nov. 5, Jessie Teitz, VP of marketing at Netflix, revealed on the company's blog today. Company spokesman Steve Swasey confirmed the plans.
Netflix, which estimated in July that less than 10% of its subscribers order Blu-ray titles, has downplayed the effect of the high-definition disc format, saying Blu-ray is unlikely to have a significant effect on sales until at least next year because of the players' high prices. The company, which first mentioned possible Blu-ray subscription-price increases in April, began testing the higher prices about two months ago.
Netflix, which earlier this week reduced its fourth-quarter forecast for sales and subscribers, is raising Blu-ray access prices "to make up for this significant cost difference" of the high-definition discs, Teitz wrote on the blog today.
The company also announced on the blog that its video-streaming service to more than 12,000 titles will be available to Mac owners by the end of the year. Netflix has been trying to boost subscribers by augmenting its by-mail service with an expanded inventory of titles through its streaming service. Within the past two weeks, the company has announced agreements to carry video-streaming content from Liberty Media's Starz movie channel, Walt Disney's Disney Channel and CBS.
In May, Netflix introduced a set-top box allowing customers to stream from an inventory of what was about 10% of its 100,000 titles. Later that month, Netflix CEO Reed Hastings said products such as Netflix Player by Roku, which had to be back-ordered within three weeks of its introduction, would double the company’s subscriber base within a decade.
