Netflix to Charge Extra for Blu-ray Rentals

By Michael Santo
Editor-in-Chief, RealTechNews

In Monday’s post-earnings analyst / media conference call, Netflix CEO Reed Hastings said that Netflix users can expect a “modest monthly premium” if they want to rent Blu-ray Discs. Formerly the rental of high-definition discs was bundled into their normal fee.

Hastings said that since Blu-ray discs cost more, and since consumers are used to paying more for high-definition content in “every other channel”, Netflix is

planning on implementing a modest monthly premium for access to Blu-ray sometime this year.

You can hear that about 5 minutes into the conference call. The fee itself and the timing were unannounced.

They also spoke more about their streaming service and about the standalone LG set-top box expected in the second half of the year. They also mentioned that besides LG they have 3 additional partners, but did not disclose the new partners. Netflix did indicate that two of the new partners are major companies, while one is a small one.

While Netflix garnered a 36% increase in profits during the first quarter, analysts’ expectations were that Netflix would raise its outlook for the remainder of the year and top analysts’ earning estimates.

But Netflix matched, rather than surpassed the average earnings estimate of $0.21 per share and slightly lowered its previous projections for its full-year profit.

Netflix shares dropped more than $9 or nearly 24% to $30.03 on Tuesday.