Leading home video rental service, Netflix, informed their Blu-ray subscribers today that on April 27, 2009 they will institute a new increase the monthly charge. The price increase depends on the volume of discs in your subscription thus subscribers could see anywhere from a $2 increase to a $5 increase to their overall subscription fee. Some of the biggest subscriptions are pushing $30 per month. This Netflix increase in Blu-ray pricing comes as the Blu-ray Association recently lowered some of their fees for the manufacture of Blu-ray discs in hopes of gaining more market share over the dominant DVD-Video format.
Netflix has been a major factor for the growth of the Blu-ray format historically. Their support of Blu-ray over HD DVD was a major victory in the HD disc format war. Making it significantly more expensive to rent Blu-ray discs will likely slow the growth of its 500,000 plus Blu-ray subscriber base on Netflix as Blu-ray still has a long way to go in terms of consumer market share versus DVD-Video. Other current subscribers may opt to restructure their accounts to allow fewer movies to be sent while still keeping Blu-ray titles coming their way without an increase in monthly expenditure.
Netflix nicely weathered the storm from their $1 per month Blu-ray fee about a year ago. The economy is much worse now and time will tell if these drastic increases will test the historically strong value proposition that Netflix has offered to consumers.