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  (Source: worldtvpc.com)
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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Makes sense
By tayb on 7/13/2011 8:35:13 AM , Rating: 2
At first I was angry at this but then I realized I just don't care about the DVD option so this is actually a $2 price cut for me. If there is a DVD I really want to rent Redbox is always open for $1 a night.

I wonder what long term effects this will have on Netflix though. There will be no mass exodus that everyone is talking about because even at $15.98 a month there is no competition in that price range. I do think that there will be a lot of people who just abandon DVDs altogether and do what I'm about to do. I don't know the companies financials but I know the business was built on DVDs in the mail. I think they will lose a lot of that business.




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