Today, Netflix announced significant changes to the movie rental service’s pricing structure in addition to a new DVD only plan. Representing their lowest price ver for unlimited DVD’s they have announced a new $7.99 a month plan for 1 DVD out at a time and $11.99 per month for 2 DVDs at a time. Netflix is further changing up the way DVD plus streaming plans work. Specifically, they are changing their plans into separate DVD only and streaming only plans. Customers would then further be able to add a streaming plan on top of the DVD plan to their account.
The unlimited streaming only plan will be priced at $7.99 a month while the unlimited DVD only plan will also be priced at $7.99 a month. Thus, the price of the lowest cost DVD and streaming monthly price will be $15 USD. The new prices are effective immediately for any new members while existing members will be subject to the price increases starting September 1, 2011.
Netflix claims that they have changed the prices in response to the realization that DVDs still have a long life and the previous model of $2 add on to the streaming plan for 1 DVD out at a time was not making them enough money cost effective. On one hand, customers are up in arms regarding the price increase for the same service they have been paying to for years, and on the other hand the price increase may allow Netflix to update its streaming catalog more frequently with new content. Regardless of the semantics, it is certainly a bold move by the company and it will be interesting to see how its customers react.
What are your thoughts on the pricing changes?