Netflix hikes Blu-ray subscription fees

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Netflix ruffled feathers online today with an email announcement that its Blu-ray rental rates would increase by up to $8 a month.

Since October, the popular movie-by-mail service has charged customers more if they want to received the high-definition discs. The original deal asked for an extra $1 on top of normal DVD rental plans. Monday's hike adjusts that fee depending on how many discs a member would like to borrow at a time.

The smallest Netflix plan – one disc at a time with a maximum of two per month – will stick to $1 extra a month for Blu-ray rentals, $5.99 altogether. For the next step – one movie at a time with no monthly cap – the firm will now charge $2 for access to Blu-ray, $10.99 in total. Each subsequent package adds on another dollar, with the largest – eight discs and no monthly limit – tacking on $9 for Blu-ray, or $56.99 a month.

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These new prices hit April 27th. DVD-only packages are unaffected by the increases.

Netflix says the new fees will help expand its Blu-ray library and recoup the premium prices of high-definition discs. Blu-ray movies are about 30 percent more expensive than their DVD counterparts, the company estimates.

"Almost 10 percent of Netflix customers are choosing Blu-ray over standard-definition rentals," reports Bloomberg. "Netflix offers more than 1,300 titles in the high-definition format, up 60 percent in six months, it said. The company plans to double the number of subscribers using Blu-ray this year, Chief Executive Officer Reed Hastings said in an interview today."

As the Bloomberg piece points out, Netflix has a stranglehold on the movie-by-mail market. It's other big venture, online streaming video, is less developed and faces strong competition from Amazon, Apple, and Blockbuster. This position encourages Netflix to further cultivate its disc-based business, then use the profits to invest in what many assume will be a digital-video-on-demand future.

Online reactions have been largely negative. Twitter comments rail against the hike as "just insane" and that "Netflix needs to get it together."

"Netflix and I are officially in a fight," writes Twitter user wcberthold. "$3 increase per month for blu ray! Because they have more titles. Preposterous."

Engadget, however, described today's announcement as "a move that will undoubtedly cause an incredibly raucous stir, only to fade away as movie renters realize that Netflix is still the best deal going."

Even after the price increase, proponents of Netflix's move into Blu-ray will argue that the rates are hard to beat. New rentals often arrive within two business days. The four-discs-a-month rate about equals the cost of buying a single Blu-ray disc – $28.99 versus $23.99 for the Dark Knight on Amazon.com. And, since many Netflix DVDs have been roughed up in the mail over the years, the newer HD options are less likely to skip mid-movie – at least for now.

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