Netflix has announced it expects 500,000 of its total 8.7 million subscribers will rent the next-generation Blu-ray format before the end of the current quarter.
The company previously announced it will charge an additional $1 per month to all customers who rent Blu-ray movie titles through the service. The additional charge will be added to all customers, though subscribers who do not want Blu-ray can alter their account online.
"As you may know, Blu-ray movies are more expensive than standard definition movies," a Netflix e-mail to all customers said after the price increase. "As a result, we're going to start charging $1 a month (plus applicable taxes), in addition to your monthly membership charge, for unlimited access to Blu-ray movies."
Even though the high-definition format has struggled as of late, Netflix is hoping subscriber demand will increase as the price of standalone Blu-ray players continues to fall. The company is facing slower subscriber sign-up rates and a growing demand for digital downloads, but hopes the $1 per month extra will help spur revenue.
"A small contributor to earnings in the fourth-quarter will be our $1 per month surcharge for those subscribers who have elected to enable access to the more expensive Blu-ray high-definition content," said Netflix CEO Reed Hastings.
In the future, Hastings expects the number of Blu-ray Netflix subscribers to increase "as Blu-ray player prices fall from $500 to $300 and below."
DVDs will remain Netflix's core business focus in the immediate future, as Blu-ray and digital downloads continue to increase in popularity. Rumors have been surfacing that Netflix will one day begin to charge its subscribers for each DVD shipped out, but Netflix has remained silent about the growing possibility of charging customers who rent physical media.
