Entertainment rental service Netflix announced price changes Tuesday that will increase the monthly cost to many subscribers who wish to keep their current level of service.
The company has divided its membership plans to separate DVD rentals from online streaming rentals, and is eliminating all subscriptions that include both unlimited streaming and DVDs by mail. The changes will take place immediately for new customers and on Sept. 1 for the 22.8 million existing U.S. Netflix account holders.
Customers currently paying $9.99 a month for unlimited streaming as well as mailed DVDs will now pay at least $15.98 to receive the same level of service, which they can only do by purchasing two simultaneous plans: unlimited streaming at the unchanged price of $7.99 a month along with one DVD out at a time (the least expensive plan) for $7.99 a month.
The company’s corporate blog said the changes reflected its confidence that DVDs by mail was a business that will make sense for many years to come, a belief Netflix emphasized by establishing a separate management team led by chief service and operations officer Andy Rendich to run that side.
Previously, customers paying for streaming could add DVDs by mail for as little as $2 a month. “At the time, we didn’t anticipate offering DVD only plans,” wrote Jessie Becker ,Netflix vice president of marketing. “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.”
Related Link:
Netflix blog post: http://tinyurl.com/636k8jb
