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Blu-ray: A ‘Passe’ Product Renters Want

6 Apr, 2009 By: Stephanie Prange

Stephanie Prange

OK. I’m starting to get a little annoyed at the Blu-ray Disc bashers.

Online DVD rental pioneer Netflix March 30 said it would begin charging subscribers who rent Blu-ray movies upwards of 24% more per month to rent the high-definition format. Netflix said the rate hikes will take effect April 27 for all Blu-ray subscribers and immediately for DVD subscribers electing to receive BD content for the first time. This is the second time Netflix has raised prices on Blu-ray renters — because there are more of them than anyone wanted to believe.

But does that have Motley Fool columnist Anders Bylund singing the praises of the high-def disc? Not a chance.
“In the grand scheme of things I see Sony’s Blu-ray format as a stopgap between DVDs and online streaming,” he writes in a March 31 column.

How is Blu-ray a “stopgap” when Netflix is able to charge MORE for it, while NOT CHARGING ANYTHING for streaming? Why is the ability to rent Blu-ray Discs now worth 24% more a month, when streaming — which obviously costs Netflix something in terms of server space, programming and IT — isn’t worth a penny more?
Netflix customers obviously place a higher value on the high-def disc than on lower-resolution streaming or they wouldn’t be willing to pay more for it, and Netflix wouldn’t be able to charge them more.

Obviously, Netflix is determined to compete in the Internet-delivery arena — even if it means subsidizing it while charging more for renting the high-def discs.

This is ridiculous. If Netflix sets a precedent of giving movie streams away for free, how will it ever be able to charge for that service? How will Netflix make money in the non-disc future when it has so devalued the very service upon which it hopes to base its new business model?

Sony has begun charging publishers a “network bandwidth fee” for all downloadable content on the Playstation Network, according to Paidcontent.org.

Microsoft’s Xbox 360 hides these costs in subscription prices to its Xbox Live subscribers.

Why is Netflix hiding these costs while burdening Blu-ray fans with higher costs? Why are they playing favorites?
It’s time to take off the streaming training wheels.

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