Wednesday, October 8, 2008

Netflix Imposes $1 Per Month Blu-ray Surcharge For HD Lovers

Because of the raise in price of necessities in today's economy, such as gas, consumers have been less likely to go out and purchase the new expensive items, such as Blu-ray players.  Blu-ray sales were predicted to rise during the first quarter of this year, but failed to do so, and even dropped 40 % from January to February.  As of recently, Blu-ray DVD's are only 8 % of disk sales.  When Blu-ray first came out, Netflix decided to pick this HD DVD rival and make it available to its customers.

The main problem with Blu-ray DVD's is that they are more expensive than other DVD's.  Because of this, and the fact that people have not been renting them frequently, Netflix will start charging its users an additional $1 a month to have the Blu-ray DVD's in their queues.  Unless the customers remove Blu-ray access from their account, they will be charged.

The fact that Netflix will now be using a dollar surcharge for their customers may show that the original plan of having Blu-ray available is not working.  While it is a nice option for those who have been fortunate enough to go out and purchase a Blu-ray player, or a Playstation 3 (which can play Blu-ray), the availability has not been enough to draw in more customers.  Netflix CEO said that only a small fraction rent Blu-ray, and the return is minimal.

This appears to be another stumbling block for Blu-ray, which has already lost the battle of dominant high definition dvd, to HD DVD's.  The overall price of the player and the DVD's themselves, seem to be too much of a problem to gain more customers.


Joseph said...

so what exactly is the point of blu ray discs?

Catherine Malcolm said...

Charging customers an extra dollar rental only discourages it's viewers from using blu-ray. To me it seems like blu-ray is separating itself from the average viewer's use, and promoting it's expensive features to those who could afford it anyway, which is not the majority! Anyways, special features such as blu-ray disks and HD are considered the luxury of television and DVDs these days, but increasing prices even more? If you're losing the battle, creating an even higher deficit to the consumers won't ensure sales to increase.

Amanda said...

I agree with Catherine. Even though it is only $1/month, Netflix advertises themselves as being cheaper than the average person renting a movie from the store. It�s convenience and cheap prices is whats helped Netflix succeed. Because Netflix has to punish their consumers for choosing blu-ray DVDS on their queues, Netflix is going against their mission. Not to mention that many consumers are not even renting out blu-ray DVDS because of the extra charge, making the blu-ray DVDS unusable. In the long run, blu-ray DVDS will go from being used minimally to being used hardly at all from Netflix users. Netflix users are happy with HD DVDs and it�s no charge.