By : Erik Gruenwedel | Posted: 28 Jan 2009
egruenwedel@questex.com

Netflix’s decision last year to add a $1 surcharge to monthly subscribers of Blu-ray Disc movies continues to pay dividends.

The Los Gatos, Calif.-based online DVD rental pioneer said it ended the fourth quarter (ended Dec. 31) with 700,000 specific Blu-ray subscribers — up 200,000 from its year-end goal.

CEO Reed Hastings, in a call with investors, said Netflix remained committed to the next-generation packaged media format and was “on par” in terms of where the trends have been over the past couple of years.

At first skeptical of Blu-ray’s market durability, Hastings said the format has proven to be stronger than DVD during its initial rollout. The executive said the service has applied lessons learned from the early days of DVD to Blu-ray distribution.

“We’re much smarter now, so we’re further down that [learning] curve than we were in DVD at this point in its life,” Hastings said. “If Blu-ray player prices continue to fall as expected, driven by next-generation chip designs, then widespread adoption becomes increasingly likely and it extends the life of disc-based viewing.”

 

---