Netflix Makes Streaming Cheaper–and DVDs More Expensive

By  |  Monday, November 22, 2010 at 6:19 am

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?



6 Comments For This Post

  1. @jereds Says:

    I wish they had a better selection of movies on streaming…then I would never have a need to rent through the mail. Hopefully this change will force them to expand their on demand selection.

  2. Mort Young Says:

    I'm tired of Netflix's analyzing my taste in movies. I have seen almost every classic film of the last 60 years (among plenty of dogs). Whether I watch (name a category) movies always, sometimes or never doesn't ever result in the right answer. I'll always try to watch a good film, sometimes because of the acting, sometimes because of the content, sometimes because of the director.
    I also find a better selection with the mailed DVDs than the streaming selection available.
    It's worth the extra $1 to have a better selection available.

  3. mritti Says:

    the selection for streaming is so lame. i would consider streaming only but would have to default to comcast on demand to watch anything worthwhile most of the time.

  4. lonewillowfarm Says:

    Not only is the selection very limited, but do you wonder what this is going to do to our already limited bandwidth!?! Most people won't upgrade their internet package just to save a buck on a lame choice of movies! Well, most smart people, that is…

  5. tom Says:

    Tried the Netflix streaming about 45 days ago. No Closed Captioning. Wrote Netflix and asked why and the response was that could not be done with streaming for some reason. Lack of Closed Captioning eliminates this method for me. If anyone knows of a change that will provide streaming with CC, maybe you can comment

  6. iphone 5 Says:

    I've be using this service for awhile now. I stream it right to my iPad and it works well. The collection is still a bit limited, but getting better. The price of the service can't be beat!