Netflix, Blu-ray and Capitalism

I’m feeling a bit dumb since getting a recent Email from Netflix. A couple of months ago I bought a Blu-ray player that also streams Netflix movies on my TV. I changed my Netflix subscription to add Blu-ray disc access for an extra buck a month.

Then the Email. The buck a month is now four bucks a month. (The increase is a dollar a month for every tier in your disc plan – I get three at a time which results in a three dollar or about a 20% overall price increase for the same content.) Netflix excuses its price increase by noting that Blu-ray discs cost about 30% more and they are adding more of them to their stock. The minimum increase for the Blu-ray subscription is 100%, 400% in my case, with worst case - only a 30% increase in costs. Nice margins.

As best I can determine, Netflix has over a hundred thousand titles and about 1300 are available in Blu-ray. About 10% of its 10 million subscribers have the Blu-ray option. So, right now, Netflix collects about $12 million a year to distribute 1,300 titles. Depending on how many people cancel their Blu-ray subscription, Netflix’s Blu-ray revenue should easily double and maybe triple with a minimal increase in cost.

Ah capitalism! Stick it to the captive niche market.

My counter-plan is to engage in Blu-ray months. Pay them their extortion a few months a year and get all of the Blu-rays that have released, then go back to standard DVDs for a few months. Repeat as necessary. Or I could just give up on Blu-ray. The player “upconverts” standard definition discs to almost Blu-ray quality and I can still use it to stream. Or, I’ll be lazy and forget about the increase – I’m just about over my mad as I type this.