Netflix hikes prices, announces DVD-only plan

By Andrew Couts July 12, 2011

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Netflix announced today that it will do away with any plan that offers both DVD rentals and unlimited streaming, starting in September. To get both services, customers will have to pay $7.99 for an unlimited streaming plan, and at least another $7.99 for the least expensive DVD rental plan. That means both services will now cost subscribers $15.98 per month, a significant increase from the $9.99 they have been paying for the same service.

Customers will now be able to subscribe to DVD-only plans, which will start at $7.99 per month for the one DVD at-a-time option, or $11.99 per month for two DVDs at-a-time plan, Netflix announced. “These plans offer our lowest prices ever for unlimited DVDs,” writes Jessie Becker on the Netflix blog. He adds: “By offering our lowest prices ever, we hope to provide great value to our current and future DVDs by mail members.”

Unlimited streaming plans, which also cost $7.99 per month, will remain the same.

Netflix is trying desperately hard to sell this change as a win for its customers. According to Becker, the company did not anticipate that many users would want to keep receiving physical DVDs after they announced the $7.99 unlimited streaming plan last November. So, rather than have DVD-only plans, they simply made the DVD option a $2 add-on to the unlimited streaming service.

Now, however, they believe that DVDs by mail has a “long life” ahead of it, so “treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs.” This, says Becker, is why they made the changes. They’ve even started a whole new “separate and distinct management team” that will be “solely focused on DVDs by mail,” Becker says.

Needless to say, Netflix users aren’t happy — or, at least, the frothy hoard that is commenting on the Netflix blog announcement isn’t.

“This is a horrible deal for current customers,” says commenter Todd Hayward. “You’re going to be losing a lot of business with this decision.”

What do you think of the change? Does this affect whether you’ll keep your Netflix subscription? Let us know in the comments.

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