Netflix today has laid out what is either the first step in restoring profitability to its physical rental operations, or the first step in killing them completely. While streaming subscriptions remain at as flat $7.99 a month, having discs sent to you as well has just gone from a few dollars more to double. Bundles are out, replaced by separate $7.99 plans that add over $5 to the monthly bill of most customers.
We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.
Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:
Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month
Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.
I expect this will cause many people to can the physical half of their Netflix subscription, something which more and more people only use on occasion for newer films unlikely to appear on streaming anytime soon. Tiered streaming has long been something that’s loomed over Netflix, with bundles like the currently free (but suspended) StarzPlay, or maybe even access to HBO’s catalog being future premium addons. While a price hike was long deemed inevitable, I don’t think anyone thought they’d take it up in a big chunk like this, and the fallout should be very interesting. Personally I’d find more value in higher priced streaming with better access to new titles (say 90 days after release) rather than the seemingly random sprinkling of movies less than a year old that pop up, but I think I’d still miss the access to the physical. My DVD queue typically has 4-5 documentaries or other more eclectic choices in it that either don’t show up on streaming for months, or not at all.