Netflix Raises Prices

by Sherrian Crumbley on November 23, 2010

in General

Netflix Streaming

photo by Solacetech

Yes, you read that correctly, Netflix is increasing the price of some of its subscription plans. I first saw an article on Yahoo, and then an hour later I got an email from Netflix informing me that they will be raising the price of our subscription plan starting in January.

Netflix will introduce a plan that allows you to have unlimited streaming movies and TV shows, with no by-mail DVD rentals, for $7.99.  The lowest plan that offers 1 DVD at-a-time by mail will increase by $1 a month, and there will be other increases announced.  Netflix explains the reason for the increases:

Why the changes? Our selection of TV episodes and movies available to stream has grown dramatically, and as a result most members want us to deliver unlimited movies and TV episodes two ways: streaming instantly over the Internet plus DVDs by mail. The price change will allow us to continue to offer the popular plan choice of unlimited TV episodes and movies streaming instantly along with unlimited DVDs.

The new plan, which does not include DVDs, is a great option for the increasing number of members who only want to watch instantly. The $7.99 a month price reflects no DVD shipping costs on this plan.

What I found interesting is that they only explain the inclusion of the “streaming only” service, but never address the price increase on the subscription plan!

According to the Yahoo article, Netflix is interested on focusing on their streaming programming as their primary business as many more consumers use the Internet as their main form of home entertainment.  Netflix CEO Reed Hastings was quoted as saying, “We are now primarily a streaming video company.”

As they decrease their DVD business, it is lucrative for them to increase what they can offer instantly, and as a result, we are paying for it.

Reader Questions:

Will you stay with Netflix for a dollar more per month?

Are there other options you recommend for similar service?


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{ 12 comments… read them below or add one }

1 Jeremiah Puckett

A dollar more a month? NO! Netflix wanted $3 more per month from me and I just cancelled. They should have a plan that has NO streaming and leave the price as is. I already pay a Blu-Ray premium. Blu-Ray!! That means I demand flawless picture and sound. Why would I want to primarily stream and have a comparatively crappy quality?

Maybe I’m one of the few. I’m not going to watch a movie on my 22″ computer monitor when I can watch a Blu-Ray on a 58″ plasma surrounded by $8,000 in speakers.

Sorry, Netflix. You dropped the ball on this one for me. I’ll start grabbing the new release Blu-Rays from Red Box for $1.50 each.

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2 Khaleef Crumbley

I think that the reason for this price increase is two-fold. First, since they have defeated Blockbuster, and Redbox & Hulu don’t offer the full array of services, they have no real competition.

Second, they are trying to increase the number of people who rely more on streaming than on physical DVDs – which is why they don’t have the plan that you desire.

You make a great point about Blu-Ray customers. I wonder if that customer base is just too small for them to care about. That might open up the floor for Redbox or someone to take offer this market. I’m sure a lot of people feel the way you do about this.

Thanks for stopping by and leaving a comment!

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3 JoeTaxpayer

It’s thanksgiving night, we’re at a friend’s house out of town. She just dropped $4 to see an on-demand movie. I can get 8-10 DVDs/ month on the single plan, still worth the $9. $108/yr is less the tab for three in theatre movies after the ticket cost and food that gets purchased.

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4 Sherrian Crumbley

I totally agree. Even with the price increase, Netflix is really hard to beat! I’m sticking with them for now. Thanks for the comment.

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5 Danielle Coleman

Im not really sure how i feel about the price increase. Of course I would love to save money, but Netflix is still cheaper than cable. I think I’ll stick with it!

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6 Khaleef Crumbley

I agree, it’s still a cheap alternative to cable.

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7 Mark

I am switching my plan due to the higher prices. I will probably drop to the 1 DVD option instead of the multiple DVD’s that I had been receiving.

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8 Khaleef Crumbley

Yeah, that’s the one we are on now. I don’t think this was enough for us to cancel, but I’m sure that some people will.

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9 Investor Junkie

the price increase is fine by me. Beats all other options hands down!

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10 Khaleef Crumbley

Yeah, I don’t see canceling the service over $1 either. But I already received a comment on Twitter that someone is canceling!

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11 Car Negotiation Coach

I think this is a great model change. I hope they are able to take that extra $1 per month and use it to move their whole library online.

The idea of shipping DVD’s then fumbling with them in the DVD player is just too many steps. It may sound like I’m lazy, but Video-On-Demand is just so much easier. My biggest problem with Netflix is that the good movies are all DVD only! But my cable provider does not have as big a library for VOD as Netflix, so I still pay for the subscription.

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12 Sherrian Crumbley

Thank you for the comment! I totally agree. My first thought was very similar, hoping that the monetary increase would mean that their streaming options would improve dramatically.

It certainly sounds as though Netflix will be trying to get their new releases streaming as well, so we’ll both keep our fingers crossed – that way you won’t be using them to fumble around with those pesky DVDs anymore ;-)

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