Netflix to hike Blu-ray rental price

[admin]

Hastings said the increase would be modest and blamed it on the higher wholesale prices on Blu-ray compared to DVD. The company expects the percentage of subscribers who rent Blu-ray to stay in the single digits this year, he said.

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Hastings announced during the earnings call that Netflix has signed deals with three more consumer electronics companies to deliver Instant Viewing to set-top boxes for easy TV playback.

http://www.contentagenda.com/article...dustryid=45173

First part is pretty much expected, as are the low percentage figures compared to DVD rentals (a lot of people rent DVDs to copy them, as evident on the number of closed posts on this forum, and Blu-ray movies can't be copied efficiently).

The second part has to do with a video streaming/downloading service that NetFlix wants to start trialing ... Xbox 360 will be one of the devices that will be able to stream NetFlix films I think as well.

So basically you have new disc (Blu-ray) versus old disc (DVD), and both disc formats versus downloads. Who will win in the end?

[stuartnz]

Originally Posted by admin

http://www.contentagenda.com/article...dustryid=45173

So basically you have new disc (Blu-ray) versus old disc (DVD), and both disc formats versus downloads. Who will win in the end?

In the States, probably downloads. There are still plenty of places where the pipes just aren't fat enough or cheap enough to make that an attractive or even viable option. Downloading just one 40GB disc would be prohibitively expensive here in NZ, for example, so I think Blu-Ray rentals and sales have quite a future alongside downloads.

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What's a Pieriansipist?

[BR7]

I think downloads will be the more popular rental option vs waiting for movies in the mail. I really don't think it will replace Blu-ray discs anytime soon.

[stuartnz]

Originally Posted by BR7

I think downloads will be the more popular rental option vs waiting for movies in the mail.

I agree, for those countries like the US with high bandwidth. For lots of the rest of us, not so much.

[BR7]

I thought these two news articles were interesting.

Amazon, Netflix Refuse To Discuss Download Business
Suggesting that the recent writers' strike may have represented a lot of fury signifying very little, two principal online movie retailers have declined to discuss results of their download services. The website ContentAgenda has observed that on Tuesday Netflix chief Reed Hastings and on Wednesday Amazon chief Jeff Bezos each refused to respond to questions from reporters about digital sales or what their companies are paying to generate them. Paul Sweeting, editor of ContentAgenda, commented: "What does it say about the pace of development in the digital media delivery business that two established, successful and savvy media retailers like Netflix and Amazon have nothing to show for their efforts? Nothing good, is what." Last November's writers' strike was triggered by demands by the writers for payment when shows they have written are offered on the Internet; likewise much of the current discussions between the Screen Actors Guild and the movie studios and TV networks centers on payments from digital media, but thus far, analysts have pointed out, there is little to suggest that any significant revenue is being generated from online movie services. In fact, several analysts have suggested that the recent tumble in Netflix stock may have been precipitated by the company's decision to invest heavily in its download service without demonstrating that it will generate sufficient revenue to justify the expense. Link

Typically a U.S. electronic sellthrough transaction generates $14.50 in studio revenue — less than a DVD sale but without the production and packaging costs inherent in a DVD sale. But with the exception of iTunes, buy rates for such services remain low. The fact is, consumers expect downloads to be cheaper than DVDs and are unwilling to pay such high prices.

Link

[admin]

Downloads (at DVD quality) should be cheaper than DVDs, since less cost is involved. However, downloads could potentially make getting movies easier and therefore make people buy more movies (could offer a price point between renting and buying) and that's probably where the movie comes from. It is the future though, because I can't imagine that 10 years later we would still all be using discs, but the question is how soon will that future arrive (I think it's at least 3 to 5 years away from mainstream adoption, but they probably need to lay the groundworks for it now if they want digital movie distribution to be mainstream by then).