Less than six months after Netflix imposed a $1 surcharge for Blu-ray lovers, the company has decided to jack up its rates once again. In an e-mail sent to subscribers today, Netflix said that it would be raising its Blu-ray access charge to as much as $9 per month on top of a normal subscription rate. The changes will go into effect on customers' billing statements on or after April 27, 2009 unless they remove the option from their accounts.
"The number of Blu-ray titles has increased significantly and will continue to do so. As we buy more, you are able to choose from a rapidly expanding selection of Blu-ray titles," reads the e-mail from Netflix. "And as you've probably heard, Blu-ray discs are substantially more expensive than standard definition DVDs."
As a result, the monthly charge for Blu-ray access is going up for "most" subscription plans. The e-mail doesn't go into detail on those differences, but a post on the Netflix blog says that Blu-ray access will remain $1 per month for the lowest plan (1 DVD at a time, limited to 2 per month) while it will go up one dollar per plan tier after that. For example, the 3 DVD at a time unlimited plan will require a $4 Blu-ray access surcharge if customers want to continue renting high-definition movies. If you're one of those heavy movie watchers who pays for the 8 DVD at a time plan, the additional charge will be a hefty $9 for Blu-ray discs.
Netflix has made a significant investment in Blu-ray since the death of HD DVD, and its library of HD titles has grown as a result. The company's hope was that a ready supply of Blu-ray flicks would lure HD fans to the service from brick-and-mortar competitors like Blockbuster and from the growing HD download market.
The imposition of the original surcharge—and now the increased rates—is indication that this strategy isn't working out as well as the company had hoped. The availability of Blu-ray movies was a nice perk for subscribers who already have Blu-ray players, but it is apparently not enough to draw in new customers. In fact, Netflix CEO Barry McCarthy said recently that only a fraction of his company's subscribers currently rent Blu-ray discs and that the format's impact on the business is minimal. Now, not only is Netflix passing the additional costs onto subscribers, it has to do so even more than it originally expected.
Needless to say, customers are not thrilled at the news. Ars Creative Director Aurich Lawson described the move as "weak sauce," adding that he was happy to swallow the $1/month bump, but $4 (for his plan) gives him pause. "If I find I'm not using the service enough, the price jump is enough to make me think of dropping it all together," he said. Another reader wrote in saying that he paid for his Netflix subscription in order to get streaming access—the only physical discs he rented anymore were Blu-ray, so the additional costs were becoming a burden. "Way to annoy their customers twice," he said.
Netflix ups Blu-ray surcharge to $9 for heaviest users - Ars Technica
