Netflix caused an uproar among its users today with a change in its subscription plans that boils down to a not-insignificant price hike for customers who want unlimited online streaming and unlimited DVDs by mail. Netflix will charge separately for DVDs and streaming. For example, someone currently paying $10 a month for streaming and one DVD at a time will pay closer to $16 per month.

It’s part of the company’s broader shift away from DVDs in the mail, as AllThingsD explains. But it comes at a time when there are plenty of options for content, from Hulu to Redbox to on-demand video from a cable company. Some Netflix customers are fed up enough to at least threaten to cancel, as msnbc.com notes.

As a longtime Netflix subscriber intent on keeping my entertainment spending within a budget, I know this will be a major topic of discussion over the dinner table tonight. How will the conversation go in your household? Vote in our poll below to help us get a sense for the mood on this one.

 

Comments

  • http://twitter.com/amccaffrey Andrew McCaffrey

    Amazon must love this price hike.

  • http://www.intrinsicstrategy.com FrankCatalano

    Intensely annoying. For those of us who have streaming + DVD, it’s the second price hike in a year (the first, in January 2011, was comparatively minor).

    This separation of subscriptions with identical prices might have been fair if all DVD content were available streaming, and vice versa. And what you were paying for was mode of delivery.

    What Netflix is doing is punishing the customer who both does streaming and may watch one or two DVDs a month of new releases that aren’t available through streaming. Companies with good customer service (or even not-so-good) bundle if a customer wants multiple services/subscriptions from a single company, or at least provide some discount for continuing, loyal customers if there is a dramatic price change. Netflix is doing neither.

    By the way, if you try and call Netflix right now to discuss subscriptions you are likely to get the recording, “Thank you for calling Netflix. We are experiencing higher than normal call volume. Please try your call again later.” It took four calls to bypass this recording and merely get the recording that hold times are in excess of 15 minutes. There is no option to send an email on their site or contact them any other way. Brilliant customer service, again.

  • Guest

    I’ll be keeping my DVDs by mail and I’ll use Amazon’s free Prime member streaming with pay-per-view rentals to make up the difference. Netflix thinks its streaming service today is worth $8 and its DVD service $2 per month, but the exact opposite is true.

  • Anonymous

    This increase is crazy. Netflix looks good, but too expensive now. An
    alternative is the service from  “TVDevo” website that runs well and
    consumes less bandwidth. I found out about it on the CNN site a while
    ago and have been using it since.

  • http://www.facebook.com/profile.php?id=1086131350 Dan Anderson

    My wife and I decided to cancel our Netflix account because of the price hike. We rarely use the discs by mail (the same DVD has been at our house for weeks). And we only watch a limited amount of Netflix’s streaming video content. For the most part, we just buy movies through Comcast’s On Demand service. Netflix’s price hike was enough to make us take a second look at the value of their service and ultimately it was something we felt we could live without.

  • http://www.facebook.com/chuck.goolsbee Chuck Goolsbee

    I bailed out of Netflix last year. It was good while it lasted.

  • http://www.facebook.com/people/Greg-Smith/1656862338 Greg Smith

    I was on the 1 DVD + streaming option.   Like another commenter said if all were available via streaming it wouldn’t be such a big deal.  But newer movies are only available via DVD since the streaming is pretty limited.  No longer worth the price in my family so I canceled today.

  • Anonymous

    We have the three-at-a-time DVD plan, and here’s what that change looks like, from the Netflix email … 
    ——————————————-

    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 $19.99 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, 3 out at-a-time (no streaming) for $15.99 a month

    Your price for getting both of these plans will be $23.98 a month ($7.99 + $15.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

  • Geary Eppley

    I’ve been a Netflix member since March 2000. I am grandfathered in to a 4 out at a time plan. These are the options I got from Netflix:

    Your current $19.99 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, 4 out at-a-time (no streaming) for $21.99 a month

    Your price for getting both of these plans will be $29.98 a month ($7.99 + $21.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

    That’s a $10 increase (50%) to keep the same plan in have today. I’m jumping ship. 

  • Dainbramage

    Since they’re charging more for the streaming, they’d better improve the video quality and add some more titles. Some of the quality (especially of movies) is terrible.

  • http://www.intrinsicstrategy.com FrankCatalano

    We have the one-at-time DVD plan (which led to my earlier comment here
    saying the two prices were the same, but the content provided wasn’t, as
    both streaming and one-at-a-time DVDs are $7.99 each).

    For subscribers like
    me, that’s an increase of 60% from current prices. Even more if you
    consider the plan was less expensive until January 2011 — from that
    price, less than a year ago, the new DVD+streaming combination for
    one-at-a-time DVD subscribers then is an increase of 78%.

    The email from this month, and from November 2010 announcing the January 2011 price increase:

    [NETFLIX E-MAIL JULY 2011:]

    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.

    These prices will start for charges on or after September 1, 2011.
    [NETFLIX EMAIL NOVEMBER 2010:]
    We want to let you know about two important changes to the Netflix service.

    1.   The price of your current plan is changing from $8.99 a month to
    $9.99 a month. This new price will be effective with your next billing
    statement on or after January 2, 2011, and will be referenced in your
    Membership Details. With your current plan you can both instantly watch
    unlimited TV episodes and movies on your computer or TV and receive
    unlimited DVDs by mail.

    2.   We now also offer a new $7.99 a month plan which lets you instantly
    watch unlimited TV episodes and movies on your computer or TV. This
    plan does not include any DVDs. All the titles you can watch instantly
    on your current plan are also available on this new plan, and as a
    reminder, not all titles on DVD are available to watch instantly. This
    new plan is available immediately – if you’d like to switch to this new
    plan at any time, simply visit Your Account.

    Why the changes? Our selection of TV episodes and movies available to
    stream has grown dramatically, and as a result most members want us to
    deliver unlimited movies and TV episodes two ways: streaming instantly
    over the internet plus DVDs by mail. The price change will allow us to
    continue to offer the popular plan choice of unlimited TV episodes and
    movies streaming instantly along with unlimited DVDs. The new plan,
    which does not include DVDs, is a great option for the increasing number
    of members who only want to watch instantly. The $7.99 a month price
    reflects no DVD shipping costs on this plan.

  • http://www.columnbreak.com columnbreak

    Since I’m going from “streaming + 1 DVD” to the “streaming-only” plan, the price hike is a good excuse for me to save a few dollars each month. When I get a DVD, it usually just sits on my coffeetable for weeks, and sometimes I never watch it.

    I don’t see the whole price hike as terrible, but if the collection of streamable movies isn’t significantly upgraded in the next few months, I’ll probably ditch the whole service.

  • http://profiles.yahoo.com/u/6G3ZZJCHOLYP3S5CRCIHQ7WDSE MVIM

    I understand why Netflix is raising prices. They have to pay the bill to the greedy movie studios so we can watch movies. The studios don’t realize they are simply biting the hand that feeds them. I’m sure they don’t like that DVD and Blu-ray sales are flat while Netflix is making money. They’re determined to have the whole pie or take down Netflix trying.

    The reality is, though, that I and many others rarely use instant streaming as their library is pretty lackluster and any time I find shows I like they rotate them out of cycle within a month or two. The DVD service is still good because it has a complete library, but it isn’t HD. I refuse to buy any Blu-ray products since Sony collects license fees for the patents it owns on the technology. Moreover, I would never pay the extra fee just to have the privilege to rent Blu-ray discs from Netflix if I did have a Blu-ray capable player. Regardless, I always felt $10/month was the upper limit I could see paying for a service that still has the aforementioned flaws. I have been debating canceling it for a few months, but this made the decision for me. Come
    August 31, I’m canceling DVD and streaming services. It just isn’t worth it to pay $8/month for either one alone. Both services together is almost worth it, but separately they aren’t. Netflix as a whole, really is greater than the sum of its parts.

    • Guest

      If you object to using a technology that causes Sony to receive license fees, I would recommend divesting yourself of DVDs. DVD technologies are also patent-encumbered and Philips,
      Pioneer, Sony and LG reap benefits from licenses to use them.

  • http://www.facebook.com/profile.php?id=100000990136148 Dump Netflix

    START A NETFLIX REVOLUTION.

    Join the DUMP NETFLIX IN SEPTEMBER facebook page and click like…then DUMP NETFLIX IN SEPTEMBER!

    http://www.facebook.com/pages/Dump-Netflix-In-September/101599369938028

  • http://twitter.com/tommyunger Tommy Unger

    NFLX is definitely taking a gamble here.  These poll numbers indicate a net average subscription per customer per month of about $6.36 (vs the current $10+ per month).  Even with some adjustments (taking out undecided, accounting to the fact that this is probably a self selected negative group, and the fact that many people still get DVDs by mail) I’d estimate $8.80 per month per customer.  I think the biggest variable is how many people will actually cancel.  I think Netflix made an educated guess–they do have the knowledge of the Netflix prize after all :-)–and they think this number will be very low.  I wouldn’t be surprised if they anticipate (and achieve) a sub 10% cancellation rate.  Only time will tell.

    • Ravgr

      Just cancelled Netflix.  Subscription was up tomorrow.  The only thing a company understands is its bottom line, and all the whining won’t do a damned thing. 

      Vote with your money.

      • http://pulse.yahoo.com/_KEDPBYMYPDF4WF6MGDDOA4U63M Razz Texas

        I convinced about a dozen folks to cancel.  Many just had streaming so experienced no price increase.  I think I’ve convinced most of them to stay quit, but a few plan to rejoin after Christmas after we research other options [compare].  I really wish a few million more folks would dump them.  I mean….there is NO penalty for quiting and rejoining later.  They care NOTHING about loyalty, per their price increase/money grab on long-time members.  I’m very frustrated so many just sent them money without consideration.  Netflix probably netted 50 million of this increaase the first month.

  • http://ClaussConcept.com Jason Gerard Clauss

    What drugs is Netflix on anyway? How can they even think of getting rid of their DVD business when there’s no service on earth that can offer that level of selection through streaming alone? That doesn’t even come close to making sense.

    In fact I wrote an article on the downfall of the Netflix UI as a result of their newfound foolish hubris: http://www.claussconcept.com/i-aint-tryin-to-flex-this-making-netflixs-new-design-suck-less/

  • http://www.facebook.com/people/Greg-Smith/1656862338 Greg Smith

    I’ve already canceled as my billing date was in a few days.  You have to pay attention to when you should cancel.  If your billing date is towards the end of the month, canceling on Sept 1 will mean you’ve lost a month’s worth of rental that you have paid for.  As a reminder, they cancel immediately and there are no refunds for partial months.  I decided to cancel yesterday since I didn’t want to give them one more dime.

  • GeekWire Fan

    I think the price increase for Netflix and the customer outrage interesting. I’ve used Netflix since 2000, and while I use to get the 3 disc plan (3 DVDs out anytime, keep as long as you want), but reduced it to 2 DVD plan when the instant streaming video service was added. When they added instant streaming, they didn’t really raise the price, it was like an added free service to get more people to sign up. Not all movies are on instant streaming, but over 10,000 movies. Instant streaming is best for older movies and documentaries, which I like, not ideal for new releases since the studios block it from instant since it competes with DVD/Blu-ray sales. 

    The competitors to Netflix are Blockbuster, Redbox, Amazon.com (rent and buy), and iTunes. None of them even hold a candle to the inventory or quality of service. And the ones like Redbox and blockbuster you spend more in gas and time each month driving to/from the store/kiosk. 

    With Netflix, and with no Comcast cable TV anymore, I watch about 10 DVDs per month (send to my home mailbox, prepaid postage to mail back, 2 business days to receive next DVD), and watch an avg of over 30 movies/documentaries via streaming each month. About half of the 10 DVDs I get per month are movies on Blu-ray (either I haven’t seen, or want to re-watch in HD) that aren’t available via streaming. Not all streaming is in HD, but more and more is. 

    With my current 2-DVD plan plus Blu-ray mode and instant streaming, after sales tax, I pay about $20. With the price increase, that will go to $25/month after taxes. I can choose to keep it as-is, or drop to 1-disc at a time to still pay $20. Considering how much I use it without cable TV, I will probably keep the 2-disc plan and be totally happy with the amazing value of the service overall. Comcast and Time Warner raise prices on cable packages and converter boxes every year, I’d say about $5 per bill at least, and never tell people, and most people don’t even notice it, since they are often paying $75-$150+ total already.

    • http://www.facebook.com/people/Greg-Smith/1656862338 Greg Smith

      Yes some cable companies increase every year by ~$5, but that is around 5 –  10%.  For users like me, the Netflix increase was 60%.  For me, each product(DVD, streaming) is incomplete but having to pay $16 for both is too much.  Obviously everyone’s use case is different.  For $11 I can add a “premium service” to my Dish Network plan.  That would add the “new releases” that would show up around the same time that Netflix makes them available.  BTW, my dish bill has not gone up at the same rate as the cable company … maybe $5 over the last 3 years.

  • http://twitter.com/cybersleuth58 cybersleuth58

    I’d be in the solid majority were it not for the fact that I canceled my cable TV days before Netflix dropped this one on us. I was counting on Netflix and Roku to fill in the gap. Now I am looking to amazon, as I already have a prime membership and was unaware I get streaming video as a bonus. It is amazing that corporations are sticking it to the struggling consumer even as they report massive profits. It has become the American business model. I just read that Netflix stock has doubled in value perhaps greed could be a factor? They are quite confidant that consumers will gripe but not boycott. I would love to prove them wrong!

  • http://pulse.yahoo.com/_KEDPBYMYPDF4WF6MGDDOA4U63M Razz Texas

    Seriously people, if you don’t dump Netflix…just to send a message…you are cheating yourself. Really, you don’t need Netflix for a few months. You can live without it. There is no penalty for cancelling and signing back up a few months later. Price ain’t gonna change. Netflix doesn’t care about loyalty. The CEO doesn’t care about you, obviously. DUMP NETFLIX today…let them sweat….and resume your addiction next year. SEND A MESSAGE.

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