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Netflix is making two big changes to its plans and prices that will either prove to be successful, or rub subscribers the wrong way

On-demand video streaming and video rental-by-mail company Netflix has enjoyed bundles of success recently, reporting 23.6 million subscribers worldwide this year. But now, Netflix is making two big changes to its plans and prices that will either prove to be successful, or rub subscribers the wrong way.

The first new change is the introduction of DVD-only plans. Customers have the option of paying $7.99 for one DVD out at a time, or $11.99 for two DVD's out at a time, but the plan does not allow video streaming to be included.

The second new change is the separation of video streaming and DVD plans. While current plans bundle the two together for $9.99 per month, the new plans will be either DVD only or video streaming only. A DVD-only plan with one out at a time costs $7.99 per month, and a video streaming-only plan costs $7.99 per month. No longer can they be bundled together.

If a subscriber wants both plans, the monthly cost is $15.98 per month.

According to Netflix, the reason for these changes is to meet demand for DVD by mail, and the current $9.99 plan (which is $7.99 for streaming and an extra $2 for DVDs by mail) does not make sense financially. Netflix believes DVDs should not just be a $2 add-on cost, but a broader, individual plan of its own. Also, Netflix wants to ensure the long life of DVD by mail options.

These changes are effective immediately for new members, but for existing members, these changes are effective September 1, 2011.

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By icanhascpu on 7/12/2011 7:51:20 PM , Rating: 5
So while the vast majority of their user-base is still tightening their wallets and being more choosy about what extras they pay for when they have spending money, lets raise prices and babble some BS PR to make it seem okay.

Whos dumbass idea was this? To top it off, lets NOT have even close to the same selection on out streaming catalog as our DVD catalog, but lets charge the same price. Also, lets not give a discount for buying both packages!

This is how you set yourself up for competition (even if non-existent) to obliterate you. Change this shit or Netflix will be the new Myspace in two years.

RE: Morons
By Smartless on 7/12/2011 8:37:02 PM , Rating: 1
Yeah I wonder if iTunes along with Apple TV will become a player. Other players like Amazon, Hulu, and even MS might all ramp up their efforts.

But you're right. This may be the tipping point when fans become enemies. When corporate gets greedy. But don't get your panties in a bunch. If Netflix corporate sees that this was an unpopular idea, they'll release a platinum membership which will allow both streams and dvds (but not allow blu-rays, lol).

RE: Morons
By Mitch101 on 7/12/2011 9:13:13 PM , Rating: 5
Im ok with this. Im a streamer and could care less about getting a physical disc. I though I did at first but really the discs that arrive in the mail I find useless and return them without even watching them most of the time. So Netflix is just risking the disc in the mail for only $2.00 more.

Im also all for Netflix making a profit too they never once screwed around like Blockbuster did with me.

Besides $2.00 less is two redbox rentals at my local gas station if needed.

RE: Morons
By jeepga on 7/12/2011 10:39:30 PM , Rating: 2
Netflix had an 88% increase in profit last reporting cycle. They're making good profits. This is their second price increase in a year.

I couldn't care less if there is a reason behind it. It's unacceptable and I will be cancelling my subscription before the increase goes into effect.

RE: Morons
By Mitch101 on 7/12/2011 11:08:16 PM , Rating: 5
Its a $2.00 price cut for me.

Not long ago the only option was DVD rental no streaming and it cost more than $8.00.

I would also bet that increase was due to Blockbusters Chapter 11 not all of them went to redbox.

I even look at Hulu+ at $7.99 and that has commercials and think Netflix is a better offer where the two compete with one another where Netflix is the $8.00 commercial free version.

I still think its a good bargain if not there is always redbox.

RE: Morons
By FITCamaro on 7/13/2011 9:42:29 AM , Rating: 1
Yeah I might take this money from cutting DVDs off and go get Hulu Plus. I'll keep streaming for now.

Netflix is risking shooting themselves in the foot here. I didn't mind the last price increase. But this one is a bit ridiculous. Charging roughly double the prior cost?

Sorry but if they were going to do this, they needed to provide reasons such as massive increases in licensing fees for movies. Put the blame on the movie industry. Not give a BS reason that amounts to "We want more money".

Now if they take this (potentially, depending how many people cancel) higher revenue and drastically improve their streaming options, this could turn into a win for them.

RE: Morons
By Klober on 7/13/2011 5:25:27 PM , Rating: 2
Yep, they will be losing $7 per month from me alone. I have the 2 DVDs at a time plan and am paying $14.99 + tax/fees (comes out to $16.38), and now they want to split it up and increase the rate to $7.99 + $11.99 per month and jack me for another $5? Kiss my you-know-what. The only reason I'm going to keep the streaming for now is because my girlfriend's kids love watching TV shows on it. Unless they improve dramatically I'm jumping ship completely when a better alternative comes along.

As an aside, they say you're paying an extra $2 per month for the DVD, yet for 2 DVDs at a time they charge an extra $5. I call shenanigans. To me that says you were paying $5+ for the DVDs and the rest for the streaming on the $9.99 plan. The reason for the + is because usually you get a discount for higher quantity, so the first DVD was likely more akin to $6-$7 per month. I hate BS marketing that just tries to excuse stupid decisions.

RE: Morons
By someguy123 on 7/13/2011 5:42:47 AM , Rating: 1
You don't care if there actually was a reason?

What kind of sense does that make? If they were forced to do it financially they should just become nonprofit and offer you movies at cost?

RE: Morons
By tastyratz on 7/13/2011 8:39:39 AM , Rating: 2
No he is saying he doesn't care because they explicitly are making very high profits and got greedy. The majority of people who buy netflix for streaming are not going to be using the dvd plan. The pr is crap, the reasoning is crap, and the viewpoint is crap. This is not selling dvd for $2 more, this is selling an additional infrequently utilized service to an existing customer base and increasing revenue/attach rates.

The price of 7.95 for streaming only is not what netflix will likely incur wit their costs (given their profit margins now) but what a panel determines their customer base is willing to pay- I bet they could make a profit selling it for 2.95... Instead of looking at it as dvd for only $2 more one could argue it's dvd for $7 more and the streaming is reduced to 2.95 in that package.

Most people who sign up for streaming are choosing the dvd service as a safeguard in case their favorite show/movie is not available streaming. This acts like insurance to lure new customers and keep short term members. They don't exactly offer a unique service here.

Maybe they should allow a "voucher" towards 1 dvd rental of 7 days per month or similar to appease streamers?

Netflix has tempted me in the past, and I do not currently have an account - but I can say for sure now I would NOT sign up. I would primarily use streaming and occasionally use rental but now find the bundle pricing of the 2 to not be a good value.

RE: Morons
By tigz1218 on 7/13/2011 8:41:58 AM , Rating: 3
How is it "unacceptable"? Was renting movies a fundamental right that I am unaware of? It's called capitalism, and when companies make mistakes, it opens the door for a competitor. Maybe that could be you. Learn from things like these how to capitalize, not get angry, and you will be a very successful person.

RE: Morons
By Hiawa23 on 7/13/2011 1:59:44 PM , Rating: 2
I agree, it is called capitalism, same with Apple, same with MS, same with Sony, same with Goodyear, & I seriously don't know how any of you would know how much money or profit this company has made, last quarter or other. Personally, I don't have an issue with it as I love the Bluray new releases, & if I had to do without one it would be the streamin feature cause the streamin movies, even though I have over 150 in my Q these are basically tv shows & old movies, of which if I wanted I could get the physical copy. If Netflix opens up the new releases without the restriction, I would love that as there would be no day wait for the physical copy. I would be willing to pay alittle more for this pay option as I love the new released Bluray, many of these not available for streamin, so there is noway I would pay for streamin only. My HDTV also has the Netflix ap on it which is cool as my TV uses less power, & heat than my PS3 or Xbox360, & i have been using it for my stremin movies lately.

RE: Morons
By rubbahbandman on 7/13/2011 12:18:20 PM , Rating: 2
I assume the reasoning behind this is reducing SG&A (Selling, General & Admin expenses) and improving cash flows.

If you take a look at their quarterly report SG&A has increased substantially, no doubt a large portion is attributed to the physical media side of their business.

It seems a bit odd that they don't offer any sort of discount for bundled packages though...

RE: Morons
By Denigrate on 7/13/2011 9:54:38 AM , Rating: 4
I went to the streaming only option when they offered it, so this has zero effect on me. I hate physical media at this point as it's simply something else to keep track of around the house.

I'd guess Netflix wants to move to streaming only, and this will help get them there.

RE: Morons
By Stuka on 7/13/2011 1:07:45 PM , Rating: 2
I don't know how you do it. 9 times out of 10 the movie I want to watch is not available instantly. Last week I wanted to watch Transformers 2, not available. But thank god just about every B-movie, campy horror or 1940s western is available instantly. I don't get it.

RE: Morons
By theslug on 7/13/2011 1:12:24 PM , Rating: 2
It's good that their streaming service actually has a lot more than what you just described.

RE: Morons
By Reclaimer77 on 7/13/2011 1:27:26 PM , Rating: 3
Last week I wanted to watch Transformers 2

Uhhh, why?

RE: Morons
By JediJeb on 7/13/2011 2:55:02 PM , Rating: 2
I don't get it.

The movie studios are to blame for this, not Netflix. The studios want you to stream all the old westerns and B movies that is how they make money off them because no one would actually spend $15 to buy one, and they make more money streaming those than selling them in the bargain bin for $3. Something like Transformers 2 they can still sell at Wal Mart for $10 or more, why would they want you to be able to stream it and make only a few cents per copy?

Just thank goodness that the MPAA doesn't get their way or you would be paying $7 every time you stream a movie because that is what they would have made at the box office and you got to support those starving actors you know.

RE: Morons
By icanhascpu on 7/19/2011 3:33:02 PM , Rating: 2
What will help them get there is having content that matches the physical DVD service. Not upping the cost and adding little.

RE: Morons
By Belegost on 7/12/2011 9:27:04 PM , Rating: 2
I've decided to cancel service with them once this goes into effect.

The streaming service alone is not worth $8/month to me due to the extremely limited selection of captioned titles. (A big deal when your wife is deaf.) I used the streaming on my phone to pacify bored kids, and occasionally for myself when home alone.

One-disc at a time for $8/month is ridiculous in the current market. Considering the USPS delay, I can only get 4-5 disks/month one at a time, giving a cost of $1.60 - 2.00/disc which is the same or more than Redbox. However, the convenience of being able to get a movie immediately (at least compared to 2-3days later for Netflix) makes RB hugely more attractive.

I suppose to a certain extent I have underutilized Netflix for a while now, but $10/month seemed ok for something I used occasionally. The changes in price have just prompted me to re-evaluate.

RE: Morons
By SilthDraeth on 7/13/2011 12:19:01 AM , Rating: 4
Redbox has a horrible selection of b rated movies I can't even find on imdb. I cancelled Netflix for a while, but I will most likely be getting the streaming only plan soon.

RE: Morons
By crimson117 on 7/13/2011 9:59:40 AM , Rating: 2
I found Redbox to have most new releases within a month, provided they're not sold out.

Redbox kiosks really should list movies that it carries but are not currently in stock, so you know to come back the next day when it might be returned.

RE: Morons
By mcnabney on 7/13/2011 12:48:33 PM , Rating: 2
Did you not notice the huge board of newly released titles right next to the touchscreen? If it is shown on the board, but not in the POS they carry it but the box you are using is out.

RE: Morons
By quiksilvr on 7/13/2011 9:30:36 AM , Rating: 2
I don't think you completely understand what they are doing.

Well over half of its customers do NOT have DVD plans bundled with their streaming service.

As shocking as this sounds, Netflix HAS heard of Redbox (crazy, I know!) and realizes that most people with their streaming only plan are just renting the occasional new release from there.

It costs them over 30 cents to ship a DVD.
It costs them five cents to stream a movie.

They are doing this because they want people to turn away from DVD and move towards streaming because:
1) Its loads cheaper (no facilities, no shipping costs, no broken DVDs or Blu Rays to take care of)
2) Its instant instead of two day lag
3) No bullsh|t trailers and menus to deal with. You just click and the movie starts.
3) Their movie and show selection is quite substantial, and almost everything I have watched has subtitles (although we might have different taste).

If anything, you will just be saving $2 by downgrading to the $7.99 and spending those $2 for the occasional movie.

RE: Morons
By mcnabney on 7/13/2011 12:59:33 PM , Rating: 3

The streaming selection is pathetic at best
The streaming service is down 3-4 times a month - usually at peak times
The resolution is fairly crappy
Zero percent chance of special features/languages/commentary

RE: Morons
By theslug on 7/13/2011 1:06:48 PM , Rating: 2
I don't know where people are getting these ideas about the streaming selection. I've pointed out on a couple of occasions before that this was the case several years ago. Today there is a huge selection of both old and new content that is also quality, especially with TV series. And I don't mean old series no one's ever heard of. They have a lot of popular things on there.

The video problems I can agree with though. Far too often I see content that has strobing/flickering during camera pans, or things are presented in the wrong aspect ratio and therefore the picture is cropped.

The selection is pretty decent, but the video presentation is very spotty.

RE: Morons
By JediJeb on 7/13/2011 2:57:48 PM , Rating: 2
The streaming selection is pathetic at best

Where can you find a better streaming selection?

RE: Morons
By tekzor on 7/14/2011 12:02:38 AM , Rating: 2
no other languages kill the anime streaming for me:(
Will have to stay with stream/2DVD plan -_-

RE: Morons
By quiksilvr on 7/14/2011 10:13:09 AM , Rating: 2
Watch IP Man in HD and tell me the resolution is fairly crappy. Watch Top Gear in HD. And their selection is beast.

RE: Morons
By Reclaimer77 on 7/13/2011 9:35:09 AM , Rating: 2
One-disc at a time for $8/month is ridiculous in the current market. Considering the USPS delay, I can only get 4-5 disks/month one at a time, giving a cost of $1.60 - 2.00/disc which is the same or more than Redbox.


Go rent 5 Blu-Ray movies a month from anyone else, then add up your receipts and see how much you spent.

RE: Morons
By crimson117 on 7/13/2011 10:04:47 AM , Rating: 2
Well, 5 blu-ray's from Redbox is ~ $8 at $1.50 plus tax.

Downside is at that price you can only keep the movie for one night, while with Netflix you could keep them for several days if you wanted to.

RE: Morons
By Alexstarfire on 7/13/2011 10:11:08 AM , Rating: 2
Blu-Rays cost extra to rent on Netflix, not sure how much more since we don't rent them at our house. For DVDs he's about right. with 1 out at a time being $8 and even with the rate that I watch them I could only manage about 7-8 a month. For me that puts it more/less on par with Redbox for cost and I get a much bigger selection. Most people don't watch them the second they get in though like I do so the cost for them would be higher than that of Redbox. Of course, the differences between the two services isn't merely price. I could never cancel something like Netflix simply because of the TV-series selection. That's never coming to Redbox.

With this move we're just going to drop streaming. I don't know how people could live with streaming only since it has basically nothing that's recent. Hell, I can't even stream Friends and that series started more than a decade ago. There is a decent selection of stuff for kids... but I'm not a kid unfortunately.

May add a extra disc out instead. Having 2 out at a time just isn't making my list any smaller. I've been at 100+ DVDs ever since we got Netflix like 5+ years ago.

RE: Morons
By Reclaimer77 on 7/13/2011 12:13:37 PM , Rating: 1
I don't know how people could live with streaming only since it has basically nothing that's recent.

Because 99% of new sitcoms and movies suck? I mean seriously, there are maybe 1 or 2 sitcoms worth watching today. And ALL of reality TV is garbage in my opinion except for educational documentaries like "Deadliest Catch" and so forth.

I just got done watching the entire "Arrested Development" collection on Netflix for the second time, what a great show. Next up is all 7 season of "The Office". After that, who knows, maybe the rest of "Top Gear". This claim that Netflix doesn't have a recent enough or large enough streaming library is coming from a bunch of poor-taste narrow minded fools who can't figure out how to use a search bar.

Hell, I can't even stream Friends and that series started more than a decade ago.

Are you a woman? Why would you want to watch that anyway! :P

RE: Morons
By Reclaimer77 on 7/13/2011 12:15:19 PM , Rating: 2
*edit* Typo on how many Office seasons, oops.

RE: Morons
By Hiawa23 on 7/13/2011 2:07:32 PM , Rating: 2
One-disc at a time for $8/month is ridiculous in the current market. Considering the USPS delay, I can only get 4-5 disks/month one at a time, giving a cost of $1.60 - 2.00/disc which is the same or more than Redbox.

Well, that sucks. I get movies the next day, & as soon as they drop them off at the Post Office the next one ships, so 4-5, I could get that many blurays in the one week. Netflix has been fantastic for me. Physical media I am fine with & stremin is just the gravy to me until they offer you to watch all movies, new & old instantly, HD & non HD.

RE: Morons
By tng on 7/13/2011 8:04:39 AM , Rating: 2
To top it off, lets NOT have even close to the same selection on out streaming catalog as our DVD catalog, but lets charge the same price.

I like the fact that I can stream stuff on my Xbox, but there is some titles that are not available for streaming, so I also have the mail service as well.

Over the last 3 years with all the economic doom and gloom I have been doing cost cutting of the monthly stuff. Netflix may have to go.

RE: Morons
By inperfectdarkness on 7/13/2011 9:07:11 AM , Rating: 4
and let's not forget that they already agreed to delay new releases for 30 days.

fuck netflix. $9/month for 1dvd+streaming was good; and i could put up with the shitty selection.

50% rate hike & no better performance, they can kiss my ass.

RE: Morons
By JediJeb on 7/13/2011 11:06:30 AM , Rating: 2
I really love how everybody is complaining about this, I guess most must not be over 30 yet or they would remember the days when it cost $5-$10 to rent a movie on VHS plus you usually had to make a $100 deposit when setting up your account with the local video store to cover the cost of tapes your VCR might eat.

The selection on Netflix isn't comprehensive by any means, yet it is better than what we had back in the early 80's at the local rental stores and much less expensive. If you were to take into account inflation back then we would have been paying $20 per movie and no streaming at all, you had to drive to get the movie and if your VCR damaged it you could be charged very high prices.

Has everyone become enamored with the thought that they should get everything they want, when they want it, and for free. I don't like having to pay more, and will stick with the streaming only package I currently have, but I'm not going to join in with the whinny babies crying about having to pay a few dollars more to get what they want. For those who are so cash strapped that this will bankrupt them, why not also cancel your internet accounts and cable and just watch OTA TV, that would save a lot more money. If you want everything for free, move to Greece.

RE: Morons
By theslug on 7/13/2011 11:19:28 AM , Rating: 2
Agreed, even with the price increase it's still the best deal around.

RE: Morons
By inperfectdarkness on 7/13/2011 6:35:33 PM , Rating: 2
back in the early 80's, i could go to a movie for $1. even in the 90's, movies cost me $2-3 (in my hometown). i didn't have to rent, because i could happily watch everything i wanted to in the theatre.

the AMC down the street here is charging $11/movie. now hollywood wants to jack up the rates companies like netflix pay--because people don't want to drop a benjamin every damn time they take their family to the movies.

i'd sooner borrow movies from someone else, pirate them off the internet, or get them from redbox--than put up with more increased price bs.

streaming is great & all, but when i can't even get something like star trek: TNG streamed via netflix--the selection is piss-poor.

RE: Morons
By Lakku on 7/13/2011 11:24:58 PM , Rating: 2
Oh really? Cuz as of right now, EVERY Star Trek series is on streaming along with the new reboot movie, and a lot of the older movies as well. I bet everyone angry or crying about piss poor selection is just like you, and doesn't even bother to check what is really on Netflix.

RE: Morons
By inperfectdarkness on 7/14/2011 3:30:04 PM , Rating: 2
when the heck did that get added. it wasn't there 4 months ago; of that i'm certain.

RE: Morons
By Reclaimer77 on 7/13/2011 9:31:28 AM , Rating: 2
You're way off base. Buying millions of Blu-Ray disks can't be cheap for Netflix either. They have a bottom line too, you know. I'm surprised that ridiculously cheap streaming+Blu Ray/DVD bundle went on for as long as it did.

You're raging over $15 a month? Really? That's only $5 more than Hulu+, and Hulu forces commercials down your throat and has no disc by mail option. In fact, for me, Netflix just got cheaper! I stream 99% of my stuff anyway.

Did you go into Blockbuster and rage that $5 a day for a new title was outrageous? Oh, nvm, you probably can't seeing as how Netflix put them out of business.

RE: Morons
By crimson117 on 7/13/2011 10:05:22 AM , Rating: 2
Does Hulu+ still include commercials?

RE: Morons
By Reclaimer77 on 7/13/2011 12:06:11 PM , Rating: 3
Yes, you pay to watch commercials.

RE: Morons
By theslug on 7/13/2011 12:23:11 PM , Rating: 2
You pay for commercials when you get a cable or satellite subscription too.

RE: Morons
By Reclaimer77 on 7/13/2011 12:35:11 PM , Rating: 2
That's beside the point. We're comparing Netflix's pricing to Hulu+.

RE: Morons
By theslug on 7/13/2011 10:33:05 AM , Rating: 2
This isn't really Netflix's fault. The cost of licensing content has gone up, so they have to pass costs on to the consumer. This is the same way mass transit costs go up when fuel costs rise, even if it means not providing any new or better service.

For those who think that $16 a month for 1 disc at a time and streaming is not a good deal, all I can suggest is you try a higher plan where the cost per disc drops.

RE: Morons
By Hiawa23 on 7/13/2011 1:40:13 PM , Rating: 2
I have been a member of Netflix since day one, but I love the service. I have the 2out at a time plan, Bluray, plus streamin & I thought I was paying $16.99-19.99/month, which is cheap to me since I go through 4-6 bluray movies a week, plus the unlimited streamin feature where I have over 150 movies & tv shows to watch. I would rather Netflix open things up & allow us to watch all movies instantly including new releases, but it seems they are not there yet. Wouldn't that save money than paying the shipping costs? I wouldn't say the person who came up with this idea is a dumb ---. Seems like good business, as we see in all parts of our lives when companies expenses go up they up costs & in these economic times you have to. I work for Goodyear & in the last couple of months we have had 2 price increases. Do we want to, no, but like I said when your costs go up, so does everything else.

RE: Morons
By sigmatau on 7/13/2011 2:09:37 PM , Rating: 2
Aren't Netflix's licensing fees going up 10x in 2 years or so? Some analysts are already predicting doom for Netflix.

RE: Morons
By TheDoc9 on 7/13/2011 4:32:11 PM , Rating: 2
yeah, just a clever way of hiding a price increase again. It seems like every six months they're doing it and now they've got to be more creative.

Unfortunately for them, I'm going to start downgrading my service because of this. Maybe convert to completely streaming.

I think this new scheme is going to backfire on them.

RE: Morons
By Hiawa23 on 7/13/2011 7:01:36 PM , Rating: 2
I got the email today that my $17.99 2out at a time, bluray, unlimited streaming, goes up to $22.98 in September. I love the service & a $4.00 increase is not enough for me to cancel. Everything is going up, & if Netflix licencing fees have gone up, do you guys really expect them to eat that. Most companies don't do that for very long. It's still a great value to me, so nothing to complain about as far as I am concerned. I have 150 bluray movies in my mail Q, & 177 in my instant streamin Q.

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