Prices Rise for Some Blu-ray Rentals

Oct 9, 2008  •  Post A Comment

Pricing for Blu-ray movie rentals online will change for the worse, but consumers willing to travel to their grocery stores to pick up a title are getting a break.
Blu-ray users will being paying $1 more per month for rentals on Netflix, as the company announced Wednesday a price increase citing the cost of the discs.
The new pricing plan will take effect Nov. 5.
“You might have heard that we’ve been talking about changing our prices for Blu-ray movies because they cost more than standard DVDs,” Jessie Teitz, Netflix’s vice president of marketing, wrote in an e-mail to customers. “To make up for this significant cost difference, we’ve decided to charge a little bit more for those who want to rent Blu-ray movies.”
Netflix has been considering the price increase since April, notifying investors during an earnings call that the rise would take place.
Steve Swasey, Netflix’s vice president of corporate communications, said there hasn’t been much of an outcry from customers and that most have understood the need for the rise in costs.
“A dollar increase per month for Blu-ray… is really very modest,” he said.
Forum users at “Movie Fans,” a site dedicated to Netflix, have voiced some concern about the price hike, with some threatening to cancel their accounts.
“I’m not happy about it either,” one anonymous user said. “I agree with you that it’s the principle more than the amount of the charge. The reason I signed up with Netflix in the first place was because they did not have an extra fee to rent Blu-rays.”
At this point, while Blu-ray is pushing to become the industry standard, the technology can be considered a luxury. Higher prices aren’t going to spur skittish consumers towards the format, Pete Putnam, president of Roam Consulting, said.
“The downturn in the economy can’t be good news for the sales of $400 and $500 Blu-ray players,” he said. ”This is going to be a lean Christmas selling season and people will definitely cut back on spending, keeping purchases modest out of necessity,” he said.
“[Blu-ray] is a luxury upsell to the average Best Buy customer over upscaling DVD players, some of which are close to $100 now,” he said, referring to units that take non-HD disks and improve their image quality. “When you can buy three upconverting players for the price of one [Blu-ray] player, there’s no incentive to upgrade.”
As Neflix announced its price increase, vending-machine DVD rental business DVDPlay announced price cuts, including Blu-ray titles.
DVDPlay lowered the price of rentals per day to $1 at its rental kiosks. The previous pricing structure was $1.49 for the first day, and 99 cents each additional day.
“In an economy of rising prices, our customers are looking for value for their entertainment dollars,” DVDPlay President and COO Charlie Piper said in a statement. “By offering more competitive pricing and a greater selection of DVDs, we’re delivering the ultimate in convenience and value to our customers.”
The company has 1,400 kiosks across the country in grocery stores like Kroger, Safeway and Albertsons.
Blu-ray discs are only stocked in 50 of the 1,400 kiosks as part of a pilot program with Sony. But DVDPlay said it is looking into expanding Blu-ray into further markets sometime in the first quarter of 2009.

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