Netflix Raises Price of DVD and Online Movies Package by 60%

Netflix advertised the change as a new choice for consumers, but thousands of the company’s customers complained online.

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I do not have cable so I make a lot of use of my Netflix account. I have the $9.99 plan that allows for one DVD in the mail and unlimited streaming. If you mail back the one DVD in a timely manner you can get 3-4 DVDs in the mail each month in addition to the streaming.

It is this plan that is going to $16. I think I am going to shut down my DVD by mail and use the $7.99 streaming only option. I easily watch ten things per month on the streaming that I find useful. At under $1 per viewing I think it is worthwhile. Do wish that Netflix had not messed with the $9.99 plan that allowed both streaming and DVD by mail. I will use Redbox at $1 per movie to subsidize what I cannot get from Netflix streaming.

Plus for libraries: There are going to be movies that are not available via streaming. Netflix is clearly pushing people more towards the streaming model. This will leave a pocket of movies that are harder to get hold of. Libraries may have an opportunity to fill this niche.

Comments

"clearly"?

How is Netflix "clearly" pushing people toward streaming? By rationalizing their prices?

I objected mightily when Netflix added "free" streaming--which looks like crap over our DSL broadband, and which we don't use--and, by the way, upped our DVD/Blu-ray price to help pay for the "free" streaming.

I'm delighted that they've split the two: it will save us $4 a month, as I dropped the streaming about five minutes after hearing about the changes.

Netflix is pushing people to decide what they want and what they'll pay for. I'm 99% certain that, in the next few years, Hollywood will be demanding streaming payments that are based on the number of subscribers--and if 20% of Netflix' users really only want DVDs (I'd guess that's low), then Netflix will only have 80% as many streaming users that have to be paid for.

And, of course, only one package went up 60%: The package that sensible people knew could not be sustained for very long.

Clear response

>>I objected mightily when Netflix added "free" streaming--which looks like crap over our DSL broadband, and which we don't use

I have cable internet and watch Netflix on a 42 inch HD TV and it looks great.

>How is Netflix "clearly" pushing people toward streaming?

There have been articles around for months talking about how Netflix wants to end the DVD service.

For example: Netflix Accused Of Trying To End DVD Subscriptions (http://www.npr.org/2011/01/21/133105512/The-Last-Word-In-Business)

The pushed me to the streaming service. I started Netflix with the 3 DVD in the mail program. Streaming was not even in existence then. After streaming became solid and I was able to watch Netflix on my large TV instead of on a laptop I switched to the 1 DVD by mail unlimited streaming plan for $9.99.

Now that they have split the service I am going to drop the DVD by mail and go streaming only. This will lower my bill. I can use the savings to pick up a movie at Redbox a few times a month.

Back to the discussion of Netflix wanting to end DVDs in favor of streaming. I gave one link above to NPR but wanted to show that others share this view.

Netflix Streaming May Signal End of DVD
http://www.youtube.com/watch?v=m_5LEgbgH4M

Why Netflix Wants You to ‘Just Say No’ to DVDs
http://www.wired.com/gadgetlab/2011/07/netflix-fees-increase-dvd/

DVDs Are Netflix's Past, Streaming is the Future
http://www.readwriteweb.com/archives/dvds_are_netflixs_past_streaming_is_the_future.php

Netflix Price Hike Details: Unlimited Streaming and DVD Plans Now Separate
http://screenrant.com/netflix-streaming-price-hike-details-benk-123247/
Excerpt from this article: It’s obvious that (in the long run), Netflix will continue to invest more and more resources in the streaming end of their business – given the especially high overhead associated with mail-order rentals and distribution centers.

Netflix expects end of DVDs
http://www.journalgazette.net/article/20101123/BIZ07/311239970/1031/BIZ
Excerpt: Netflix CEO Reed Hastings says he always envisioned movies being piped through high-speed connections – even back in 1999, when his company began mailing out DVD rentals requested on the Web. That expectation is why Hastings says he chose the name Netflix. (Comment you make when you are trying to go more DVD or less DVD?)

Netflix Price Increase Bets on Streaming
http://www.ibtimes.com/articles/179725/20110713/netflix-price-increase.htm
Excerpt: Netflix said it wants to separate the two services to "better reflect the costs of each." If one reads between the lines, this is what Netflix is saying:

"The DVD mailing business is not profitable enough and we want to get out of it. However, since we can't kill it all at once, we're going to charge customers a lot of money so that we make sure it's profitable."

Currently, it loses money on shipping DVDs to a customer if it sends out three titles or more per month, according to analyst Nat Schindler of Bank of America.

clearly?

You have cable internet. I'd bet the difference between what I pay for DSL ($25/month) and what you pay for cable internet is a LOT more than the $6 increment Netflix wanted to keep both plans. Netflix streaming looks like crap over a 1.5Mbps line. That's simply the truth.

As for reading between the lines: Netflix is lowering the price of my three-DVD subscription. That's an odd way to "charge customers a lot of money." And, in fact, Netflix officials have said clearly, unmistakably, that they expect DVD rentals to be around for quite a few more years.

For you it makes sense to drop the DVD option. Great: You're saving money, not spending 60% more. For me it makes sense to drop the streaming option, so my price goes down by $4/month instead of going up by $3/month: For the only service I have any use for, my price is going down.

I know lots of journalists and pundits, who all somehow decided that streaming is Inevitable Anyway, are calling this "getting rid of DVDs," but "better reflecting the costs of each" is a quite different thing.

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