Tuesday, October 21, 2008

Netflix sees half million Blu-ray subscribers

Netflix continues to embrace the technological shift. Not only are they deploying a download strategy, they are embracing the Hi Def world as well. And while the numbers are small, they believe that 500k of their base, or a little over half a percent, will pay a premium for HD movies on Blu-ray. Will an incremental dollar per month be felt by the Netflix customer? Or will their customer feel that this extra charge is unfair. "Netflix said the additional charge, to reflect the higher cost of Blu-ray discs, will be added to billing statements on or after November 5 and only to members who have previously enabled Blu-ray shipping on their Netflix accounts." Over the year, the added revenue impact could exceed $6 million dollars annually!

As the cost of Blu-ray players decrease, so too will the cost of discs. How long will this premium last? And will their best customers feel slighted by this added cost. Or will this increase be barely felt by this niche audience. For Netflix, the timing may be right.

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