Netflix dramatically alters streaming and DVD subscription plans

Summary:Netflix subscribers are going to have some choices to make as the online rental service has dramatically changed its DVD and streaming plans, tacking on a few new options as well.

Netflix subscribers are going to have some choices to make as the online rental service has dramatically changed its DVD and streaming plans, tacking on a few new options as well.

Let's cover the new subscription offers first:

  • $7.99 a month for 1 DVD out at-a-time plan
  • $11.99 a month for 2 DVDs out at-a-time plan

Now, here's where it gets messy. Netflix is dividing up its unlimited plans for online streaming and DVDs. That means users will no longer be able to have both unlimited Watch Instantly access and be able to rent as many DVDs per month (either one, two or three out at-a-time plans) at they want on the same subscription. Here's how it will look now:

  • 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

For subscribers who still want both unlimited streaming and at least the unlimited one DVD out at-a-time plan, they'll have to fork over $15.98 per month (thus, $7.99 + $7.99). For reference, up until now, the rate for the comparative unlimited DVD and streaming plan has been $9.99 per month.

At the very least, there is time for current subscribers to think about this and plan their personal budgets as for them this goes into action on September 1, 2011. However, new subscribers can expect these prices immediately and anyone interested the DVD only plans can head to a new portal: https://dvd.netflix.com.

Netflix subscribers (and probably everyone else) are likely wondering why Netflix got so expensive all of a sudden. CNN Money pointed out that Netflix is going to have to pay the studios much more in content costs - at least $1.98 billion - next year. So Netflix is going to need extra money from somewhere, which is mainly the subscriber base.

Even though this is likely to bug many Netflix subscribers, and surely some a few will cancel in outrage, not everyone will and probably most will either just switch to a different plan or agree to pay up more each month. Netflix notes that splitting up the unlimited offerings "better reflect(s) the costs of each," and whether that is true or not (to Netflix, the studios, the viewers or all of the above), boosting the costs of the the monthly subscription plans could turn out to be better for Netflix's overall bottom line.

Related:

Topics: Mobility, Hardware

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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