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Netflix to reshuffle streaming, DVD service plans

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By Charles Starrett

Contributing Editor
Published: Tuesday, July 12, 2011
News Categories: Digital Media, Apps + Games

Netflix today announced changes to its streaming and DVD-by-mail plans that will see users paying more for combined service. The company’s new DVD-only plans now start at $7.99 per month for the one DVD at a time plan, and $11.99 per month for the two DVD at a time plan. Gone is the $9.99 combined streaming + one DVD plan; users will now need to subscribe to both the $7.99 streaming plan and the $7.99 one DVD plan to receive the same service, for a combined monthly total of $15.98. The changes are effective immediately for new customers; current customers will see the new pricing structure take effect on September 1. [via Engadget]

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Comments

1

I am seriously reconsidering my options. I’ll probably wind up jettisoning the DVD plan at the very least, possibly scuttling Netflix altogether. Another $16 on top of a satellite provide and my other bills is too much. I can just get new releases from Redbox.

Posted by cxc273 on July 12, 2011 at 1:42 PM (PDT)

2

They’re going to shoot themselves in the foot. Most customers probably fall heavily on one side of the service or the other, either streamers or disc renters but don’t use both enough to warrant increasing their bill, and if you lose the supplement, the one you use the most becomes less attractive.

Posted by Code Monkey in Midstate New York on July 12, 2011 at 1:54 PM (PDT)

3

I’m one of those customers: doubling my service cost is way too much of an increase, even if it “better reflects the cost of each”. It was a bad business decision to offer me both at $7.99 and double it later. At least, the internet phone offers show the real cost after six months.

I’ll probably drop both.

Streaming is okay - limited catalog - and not the new stuff. DVD is full catalog, but one-at-a-time by snail mail. AppleTV (iTunes) gives me first release, right now, a la carte.

Posted by drakebullet on July 12, 2011 at 2:13 PM (PDT)

4

Not mentioned is the additional cost for Blu Ray discs which can add up to $3.00 per month to the costs on top of whatever DVD delivery plan you chose.  I have Amazon and Hulu Plus, and Apple TV.  I have also found myself ordering a new movie that premiers on DISH a month before it gets to Netflix.  I’m sure I’m not the only one who may be re-evaluating Netflix as a “luxury” I can live without.

Posted by John Campbell on July 12, 2011 at 2:58 PM (PDT)

5

A year ago I paid Netflix 22.57 mnthly. Dropped Blue-ray, down to 18.44, they upped rates, I paid 21.69 for one month. Cut back plan to two at a time, paid 16.27 for a month, then dropped to one movie, paid 10.84, and next month we’ll drop to 7.99 plus tax, just keep streaming.
Great model on how to get half as much per customer.

Posted by gully on July 12, 2011 at 3:51 PM (PDT)

6

Netflix is masking a huge price increase as a policy change.  My $17.99 plan (streaming plus 2-at-a-time including Blu Ray) will cost $22.98 on September 1.  That’s a 28% increase. 

Some customers will drop streaming, but a growing percentage of them will drop physical delivery, due to Red Box availability and rapid growth in personal media devices like iPads. 

Netflix has surely anticipated this.  Providing streaming services is far cheaper than paying postage fees, paying wages and providing health care for human beings to stuff envelopes. 

In two years, they’ll drop physical delivery altogether—and pitch it as refocusing on what most of their customers want to better serve them.

Posted by Ron Cronovich on July 12, 2011 at 4:12 PM (PDT)

7

I was thinking of shaving a couple bucks off my monthly bill by dropping the DVD part of my service, but now they’ve helped make that decision (and expedited it) for me.

Posted by rockmyplimsoul on July 12, 2011 at 4:31 PM (PDT)

8

like everyone else, Netflix will lose at least $2 a month from me.
currently using 1 dvd and streaming, my son loves the Thomas the Tank Engine and some of the nature series like Blue Planet that are streamed, as for me the library is too thin and lacking the good newer releases.
Last time that I checked one of the highest rated new movies was Gi Joe. (something that I would never waste my time watching)

I will drop the dvd at home for sure, but may drop streaming just in spite of them.

Posted by scottrey on July 13, 2011 at 9:45 AM (PDT)

9

no one has mentioned why netflix had to raise their prices. all the major movie studios have contracts with netflix that are coming up on renewal. Sony’s has already lapsed. When the contracts are renegotiated, and due to the unexpected popularity of netflix, the studios will likely charge 10x what they do now for the rights to their movies. netflix had to do something to come up with that extra cash. other than raising prices, what could they have done???

Posted by roderic on July 13, 2011 at 2:16 PM (PDT)

10

I was actually considering getting Netflix, but now with the price increase, I most likely won’t.  I just don’t watch enough movies to even justify the cost.  For the occasional movie that I may go watch, there is the RedBox kiosks as well pay-per-view and the “On Demand” service on my DirecTV.  Of course, there is iTunes and Amazon as well.  Not to mention just borrowing DVDs from co-workers at work (one guy has quite the library - would probably put most RedBox kiosks to shame!).  Heck, DirecTV even gave me a movie credit to watch a pay-per-view movie for free, but I just never got around to using it.  Now that I think about, I’ve been using DirecTV since something like 1998 and I don’t think I’ve ever used the pay-per-view feature.

Posted by SkiBumMSP on July 13, 2011 at 7:46 PM (PDT)

11

@9: We have the fable of the golden goose that nearly every person alive has heard at one time or another for a reason.

Netflix became popular because next to the overpriced, gouging “options” available elsewhere, ~$10/month to watch a DVD or two while gaining access to the on-demand streaming side of things was a good deal. If the studios think they can actually increase their profits by making Netflix cost more like the other services, well, they’re wrong.

Although, the optimist in me wonders if Netflix didn’t make a big deal about announcing this ahead of the renewals for that very purpose. When they sit down with Sony and others for the inevitable arm twisting they can point to whatever the change in subscription patterns are as real data of what such “realistic in the minds of the studios” pricing does to consumer adoption.

Posted by Code Monkey in Midstate New York on July 14, 2011 at 7:28 AM (PDT)

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