updated 01:30 pm EDT, Tue July 12, 2011
Netflix raises streaming prices to get content
Netflix on Monday confirmed the existence of its DVD-only plan while adding another and raising streaming prices. The company now has just one plan that merges both streaming and DVDs athat will cost $16, or the exact cost of the DVD-only and streaming-only services put together. A second DVD option at $12 per month allows two discs at a time.
The company explained the decision to drop any plans with a mix of limited DVDs and streaming as an attempt to simplify its lineup. It "better reflect[s] the costs" of the plans by themselves, Netflix said.
New customers see the new plans immediately. Existing subscribers will be pushed to use one of the new plans on September 1 and can't be grandfathered in.
The strategy is likely to anger existing users, many of whom had been paying $10 a month for one DVD at a time with streaming thrown in. Many of these viewers often used the DVD component as a catch-all for when a movie wasn't available for streaming and will now have to either accept a 50 percent price hike or else give up one of the two features.
Streaming has steadily become Netflix's most popular feature and has led it to get 61 percent of the US digital market, toppling even iTunes and traditional TV carriers' video on demand systems. The $8 streaming-only plan has played a role along with support on many set-top boxes, iOS, and more recently Android. Higher prices for an ultimate subscription may see some balk and turn to alternatives.