Netflix' CEO, Reed Hasting, has announced that the monthly subscription fees for Blu-ray customers will go up. The company stated that it will add a 'modest premium' to these rates. After an investor's call Netflix decided to take action and said that these measures are plain logic since customers are already used to paying more for high-def content.
Hastings defended the increase by saying that high-defenition content is more expensive at retail. "As you are aware, purchasing Blu-Ray DVDs costs more both at retail and wholesale than standard definition DVDs, and consumers are used to paying more for high-definition content in every other channel, including video rental stores, video-on-demand, and cable channels," Hastings said on TVPredictions.com yesterday.
Now that Netflix will increase its fee on Blu-ray rentals we can expect the original DVD format to exist longer. At this point the percentage of subscribers who rent Blu-ray discs are still in single digits, Hastings continues. With a price increase many don't expect this percentage to go up any time soon.
The price increase is bad, but needed Hastings says, since Netflix plans to expand its inventory. Well, the consumer loses once again.
