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SALT LAKE CITY -- Netflix has announced price changes on their DVD and streaming plans.
On Netflix's blog they announced they are launching DVD only plans which will offer their lowest prices ever for unlimited DVD's, but those plans do not include online streaming.
On their blog, Netflix has broken down their new pricing as follows:
Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.
The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99).
That's almost double what members are paying right now for one DVD at a time and unlimited streaming.
Netflix has defended their new strategy by saying, "Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn't anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members."
Despite having more than 20 million members, Netflix is eating almost two dollars on every plan that includes DVD's and streaming and the price hike is to cover that overhead.
"Netflix's willingness to risk alienating subscribers signals that it needs to bring in more money to cover its rising costs," wrote Associated Press writer Michael Liedtke. "The company's earnings would likely be squeezed if it continued to cover the overhead for buying and shipping the discs while also spending heavily to license more video for its streaming library."
Netflix customers are not happy about the price change and they've made their voices known on the company's blog. "You've decided to raise customer rates during a period of economic downturn?" wrote customer Darrin Wright. "You're forcing me to pay more for products and services I've paid for loyally for quite a while now. You're really, REALLY making me reconsider this business relationship."
That's just one of over 1,200 comments, almost all of which are negative.
The price increase will take effect immediately for new customers and start September 1 for existing customers.
Considering Netflix has more than 20 million members I'm guessing many of you reading this are customers, maybe hearing it for the first time. What's your take? Is the price increase fair, or is it too steep? Let us know what you think, better solutions and what your relationship with Netflix will be in the future? Weigh in on our comment boards and on Facebook.
E-mail: jclyde@ksl.com
