Netflix Expects 500,000 Blu-ray Users

Video rental company Netflix says it expects about half a million subscribers to use its Blu-ray rental service this quarter.

Video rental company Netflix said in a conference call discussing its third quarter results that it expects about half a million subscribers will sign on to its Blu-ray rental service during this quarter—this after the company announced it will charge an extra $1 a month for access to Blu-ray rentals.

The extra fee—which subscribers don’t have to pay if they aren’t interested in renting Blu-ray movies—reflects the higher cost of Blu-ray discs. The new fee is scheduled to be applied to subscribers’ bills beginning November 5, 2008, if a subscriber had previously enabled Blu-ray rentals on their account.

Netflix also said it expects the number of Blu-ray subscribers using its service will increase as sales of Blu-ray players rises and the cost of Blu-ray titles declines. Since the end of the HD DVD/Blu-ray format war at the beginning of this year, prices for Blu-ray players and titles have yet to see significant declines; industry watchers are expecting consumer electronics manufacturers and retailers to try to push Blu-ray prices down for this year’s holiday buying season. Netflix indicated in the analyst call that it is optimistic Blu-ray prices will decline; in the meantime, the company is also ramping up its broadband-enabled rental services in case movie fans decide to skip Blu-ray altogether.