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Netflix to raise prices for Blu-ray movie rentals

March 30, 2009 |  1:44 pm

Netflix today said it would raise prices by about 20% for subscribers who rent Blu-ray movie discs, saying the premium would allow the movies-by-mail service to stock more copies of the high-definition discs to keep pace with demand.

Subscribers who elect to only receive standard DVDs will not be charged the additional fee, which will add $4 to the $17 monthly fee paid by those who rent three movies a time. The new rates go into effect April 27.

Netflix CEO Reed Hastings said Blu-ray discs now account for almost 10% of the company's business. The company's Blu-ray selection has grown by 60% over the last six months to more than 1,300 titles. Nearly all new releases are now available on Blu-ray, which sells for about 30% more than DVDs. (A copy of "Slumdog Millionaire" that sells for $17 for the DVD retails for $26 on Blu-ray.)

The new pricing reflects the premium 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."

A full explanation of the new pricing can be found on the Netflix company blog.

--Dawn C. Chmielewski