Thursday, July 14, 2011

Netflix to screw its customers big-time


From thehuffingtonpost, Netflix is restructuring its pricing model.

Customers can kiss goodbye the service's $9.99 monthly unlimited DVD-rental and streaming combination plan. Netflix will now separate DVD and streaming services into two separate plans, each priced at $7.99. A combo plan will still be available, but at an increased rate of $15.98 a month.

There will also be a standalone DVD rental plan that lets the user check out two discs at a time for $11.99 per month. The $7.99 DVD rental plan will let users check out one title at a time.

"Netflix members love watching instantly, but we've come to recognize there is still a very large continuing demand for DVDs by mail," said Andy Rendich, Netflix Chief Service and Operations Officer, according to a company press release published on Tuesday. "By better reflecting the underlying costs and offering our lowest prices ever for unlimited DVD, we hope to provide a great value to our current and future DVD-by-mail members."

When does the changeover take place? Immediately for new users, according to a post on the Netflix Blog. Existing users will have until September 1 to select a new plan. You can also change your plan now by visiting your Netflix account and retooling your subscription settings.

With over 24 million Netflix subscribers in the U.S. alone, there's bound to be some hoopla over this markup for the unlimited combo plan.

The company last increased the cost of its unlimited DVD and streaming plan in November of 2010. That previous markup brought $7.99 unlimited streaming up to $9.99 with the addition of DVDs-by-mail.

6 comments:

Catfreeek said...

They had to screw us right before Horrorthon too! Couldn't they have waited til January.

Octopunk said...

It makes sense to me that they'd do this. It was clear that phasing out dvds isn't going to work so they split their customer base. I never stream, so I can revert to the dvd-only plan (actually, I just did it right now in the middle of this sentence) and now I'm going to save four bucks this month and eight bucks every month after that.

Customers who only stream can now ditch the cumbersome dvds they don't use, and they save two bucks this month and eight bucks every month after that.

If you routinely use both methods, yeah this sucks. And if they screw with dvd availability vs. steaming, that also sucks. And yes, price hikes do suck. But what began as an add-on to the awesome dvd service is now set to replace it; it totally makes sense for them to bifurcate their business model.

JPX said...

Octo wants to marry Netflix!

DKC said...

We mainly stream these days - it's easier with the kids. My issue is that the streaming choices aren't really that great - a lot of older movies. I hope, since they are taking away the "and dvd" option, that they expand the library of streaming options.

Oh - and that totally made me laugh, JPX!

Johnny Sweatpants said...

I just started streaming on a regular basis (been working through the Death Note series = awesome) so this news irritates me. I think I'm gonna drop down from 3 to 2 DVD's and keep the streaming going.

JPX said...

That's my plan, jsp

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