At last week’s Web 2.0 Summit, Netflix CEO Reed Hastings said that the company would soon let subscribers opt for a plan that included only Watch Instantly video streaming, without the ability to get DVDs by mail. He spoke the truth: Netflix is introducing a $7.99 plan that provides exactly that. (It’s been testing it for a while–I saw it as an option weeks ago.)
Any current Netflix subscriber can switch to the new plan right now, saving at least a dollar over the former pricing plans. Isn’t that going to hurt the company’s bottom line? Well, it has a strategy for making up the difference: Starting today, it’s also raising the price of all the plans that do include DVDs by at least $1. The new prices range from $9.99 for a one-DVD plan (formerly $8.99) to $55.99 for an eight-DVD one (formerly $47.99).
I don’t know how the economics of all this pan out, but it’s clear that the combination of a new low price for streaming and a price hike for everything else will force every Netflix member to decide just how much he or she values those little red snail-mail envelopes.
Me, I’m going streaming-only immediately–the only time we get Netflix DVDs here is when we accidentally put them in our queue when we’re trying to watch something online. (We still watch DVDs, too–but mostly box sets we’re interested enough in to buy.) But I know plenty of Netflix fans who aren’t in love with Watch Instantly, mostly because its selection is so very far from being current and comprehensive.
How about you?