Netflix Increases Blu-ray Rental Costs
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"Netflix will be adding between $1 to $9 to the monthly charge...for anyone wanting to rent Blu-ray discs!..."
Cubist commentary
When a company increases the price of a product, conventional wisdom tells us that they're trying to decrease demand. For products with elastic demand, like champagne or cruises, demand decreases as prices rise. But what if Netflix knows something that we don't? Perhaps they know that Blu-ray has developed in the marketplace such that people are willing to pay a premium, and, in fact, expect a premium. Valuable things cost more, after all. A recent post reported that the UK has added Blu-ray to their basket of goods used to calculate inflation, showing yet another indication that Blu-ray has become very mainstream. As Video Business reports "...once [consumers] start watching, you don't want to go back." Perhaps Netflix has cleverly made the opposite move from those discounting retailers because they know that when consumers get to know the superiority of Blu-ray, they won't return to standard definition. Even if consumers don't want to buy the latest Blu-ray release at a substantial premium, they may want to rent it. In fact, they're willing to pay a premium to do so. And that works out perfectly for Netflix.
File under: Blu-ray News
