Their ubiquitous red and white envelopes made getting the mail so much more fun. But now, Netflix is making it a lot less fun to pay for that privilege.
Today, the fourteen year old California-based company announced a major change to the way it charges for its DVD delivery and streaming services. From now on, Netflix subscribers will no longer be able to sign up for a single plan that gives them access to both services at the same time. Instead, Netflix is offering separate DVD and streaming-only plans, and allowing customers to sign up for both if they choose.
Pricing looks like this:
Plan 1: Unlimited Streaming for $7.99/month (No DVDs)
Plan 2: Unlimited DVDs, delivered one at a time for $7.99/month (No Streaming)
A customer can also decide to sign up for both plans, which would bring their grand total to $15.98/month. The new price structure takes effect immediately for new members and starts in early September of 2011 for existing Netflix users.
On their blog, Netflix VP of Marketing Jessie Becker said “Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs.
Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering. Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix.”
In keeping with the new separation of DVDs and streaming, Netflix also announced a new dedicated DVD-only URL — the aptly-named DVD.netflix.com.
So, the bad news is some customers will now be paying more to enjoy Netflix. But, the good news is that subscribing to both of the new plans still costs less than a ticket to most movie theaters in LA.
