Netflix flexed its muscle Monday, saying it would raise prices about 20% for subscribers who rent Blu-ray movie discs. The movie service said the higher rates would allow it to stock more copies of the high-definition discs to keep pace with demand.
The rate change, which takes effect April 27, will add $4 to the $17 monthly fee paid by subscribers who rent three movies at a time. Customers who rent standard DVDs will not be affected.
Netflix Chief Executive Reed Hastings says Blu-ray now accounts for almost 10% of the company's rentals. The selection has grown 60% over the last six months to more than 1,300 titles. Nearly all new releases are now available on Blu-ray discs, which sell for about 30% more than DVDs.
The new pricing reflects the higher cost the Hollywood studios charge for high-definition video, Hastings said.
"If you look across cable systems, satellite and also in the downloading space, high definition comes at a premium," Hastings said. "So this brings us into alignment with all the other channels for high-def."