Netflix Raises DVD Plan Prices & Launches $7.99 Per Month U.S. Streaming-Only Plan

Update: E-mail from Netflix announcing price increase added, and it states that the new pricing starts on your first statement after January 2nd, 2011.

Having successfully fought and beaten Blockbuster, Wal-Mart, and others, Netflix today announced a price increase on all DVD plans.  The price increase starts at $1 on the 1-out and 2-out plans, the popular 3-out plan has been increased by $3 per month. 

Netflix's Jessie Becker explains the price increase on the Netflix blog:

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 TV episodes and movies two ways: streaming instantly over the internet plus DVDs by mail. The price increase 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.

Netflix also launched the long-rumored $7.99 per month streaming-only plan for U.S. customers.

What do you think of the new prices? Are you interested in a streaming-only plan?

Here's an e-mail from Netflix announcing the price increase:

Thanks to Nolan & Bill for sending this in.

Comments

[Nathan]

Are the Blu-Ray extra charges staying the same? I ask because they have been having problems having blu-ray discs on release date and that has bugged me because I am paying up for that.

[PS3 fanboi]

This blows. I'll probably scale back my 3-at a time back to 2. Still sticking with Blu-Ray though...

[Howie411]

I'm going to drop down to the 2 movie a month plan now too. Dumb move on Netflix raising the price of the 3 movie (the most popular plan) So in the end they are just going to lose money.

[JDF]

Not exactly the most ideal time to raise prices considering their recent issues with streaming downtimes and less than spectacular performance when it is up. They better have gotten all of that straightened out or they'll face quite a backlash...

[Marshall Guthrie]

If netflix got surround sound going, I'd probably watch more of my movies via streaming and might consider a streaming only plan, but until then, I'm going to keep on the Blu-ray train. Given that Netflix+Hulu has allowed me to drop my cable for $11 (now $12?) dollars a month, I think the $1 increase is reasonable.

[John]

I just switched from the 3 movie plan to 2. Since I watch mostly by streaming anyway I shoud have probably done this sooner.

[Terry]

Blows indeed. I think that I'm also going to switch from 3-plan to 2. While the 3-at-a-time plan is still the most cost effective 'per disc', that plan also had the highest percentage increase.

[FR]

All this time I thought I was already paying 20 bucks already for the 3 plan ... guess I'm good with what I have and not whine about it.

[Jakeneff]

Since more and more Blu-ray releases aren't being made available by Netflix (especially catalog and TV), I think I'll take this as my cue to drop to the 2-disc plan and add a disc to my Blockbuster plan. If only you could go higher than 3 at-a-time via Blockbuster.

[Rusty Spell]

On my account page, it says this: "Your plan is no longer offered. You are currently on the 3 DVDs out at-a-time (Unlimited) for $16.99 plan which is no longer offered. If you select a new plan, you will no longer be able to return to this plan." Does this mean that, as long as I make no changes, I can maintain 3 DVDs at the origina price?

[Nathan]

Rusty Spell,

I am on the same plan. I signed up over 10 years ago when their standard plan was 4 dics out at a time. We have been grandfathered in to paying the 3-disc rate for 4-discs. Like it says, if you change anything, you lose it and will go to regular rates. I currently pay a total of $21.99 for 4-out with a blu ray add on.

[screwdestiny]

Good thing I'm grandfathered in, else I'd switch done to a 2-out. I've had way too many BS problems from Netflix to pay $3 more for their crappy service, especially since Hulu is getting a lot more anime subbed and it's free.

[PS3 fanboi]

I was going to post the same question Rusty Spell, since I also get that message. I truly hope it means we are grandfathered in. In that case I'll be sticking with my 3-at a time + Blu-ray.

[Del]

I would like to know how many devices you can use at a time on the streaming only plan. According to the terms of service you still can only use one per DVD you get. But there is nothing about the streaming only plan.

[UltimateOutsider]

Damn, I'm on the 4-at-a-time plan. The wording currently on the 'change membership' page, however, sounds like if I don't do anything I might be grandfathered in on the old prices? I think I'm just going to let it be for a while and see what happens.

[scJohn]

Grandfathering is a good question. And what about the BD upcharge? Does the new plan(s) include BD? You have my vote for a DVD only plan. If I never use streaming (little HD content). Why should I subsidize the cost of streaming content.

[Nick]

I would be fine with these prices IF they included Blu-Ray. Any word?

[J]

I guess that's what they can do when they have squashed their competition. They sure are anxious (unfortunately) to get rid of DVDs and Blu-Ray.

[9tunsten]

Netflix's Jessie Becker explains the price increase on the Netflix blog:

Because we can.

[9tunsten]

Why am I still paying an extra $2/month for Blu-ray?

Might have been a nice time to drop this? Hello?

[PeteyNice]

I am on the 1 at a time plan and am not grandfathered:

The price of your 1 DVD out at-a-time (Unlimited) plan will change to $9.99 (plus any applicable tax) a month starting with your next billing period on or after Jan 02, 2011.

I know it is just $1 but it does make me re-evaluate the value proposition of Netflix for me.

[screwdestiny]

Well, I guess Rusty Spell is special, because I looked at my Membership Details page and saw this:

"The price of your 3 DVDs out at-a-time (Unlimited) plan will change to $19.99 (plus any applicable tax) a month starting with your next billing period on or after Jan 02, 2011."

So I'm switching to 2-out.

[Mr X]

My membership dates waaaaay back, and I have always had the 4 out plan. They grandfathered me at the 3 out price many years ago when they changed prices; here's hoping they don't change that!

[Tom]

This is not a welcome change. I was happy with paying under $10 plus tax for 1 dvd plus streaming. This additional $1 isn't much but it makes me feel like Netflix is trying to pull more money from me and offer the same exact thing. I will not leave because I am satisfied with Netflix, but in the future I will take any credits they offer me for streaming problems. In the past even when I had problems since it was such a small amount and because I am of the option that computers crash, etc. I didn't take it to show my support of netflix and streaming, but now I feel nickeled and dimed so I won't think twice next time. Very glad to see Hulu plus coming up to keep the competition going. I subscribe to both and have been quite happy with Hulu+ except for the amount of content issues but that will change with time.

[Ben Duffy]

While I'm never a fan of price increases, it was inevitable. How long have DVD rental prices been at this level without an increase, even with postage increases over the years?

I personally will save $1/month with the streaming only plan. I have taken out a grand total of 1 DVD so far this year, although I may rent a couple I've been wanting before I downgrade my plan in mid-January.

For those who are moving from 3-DVDs to 2: I wonder if this is what NFLX wants you to do. By doing this they reduce the number of DVDs they need to have on hand as well as lower shipping costs.

[Karen]

How do you know if you are "grandfathered" in or not...?

I have 3 at a time and will drop to 2, if not.

[Ritch]

I was afraid if the streamers got their wish and Netflix added a $7.99 streaming-only plan in the US that they would need to have more price differentiation in their service tiers which didn't leave much options other than to jack up the DVD rates. I think it's BS that DVD customers are going to be paying more for less service (30-day window plus long waits on most/all new release DVDs). The DVD-by-mail delivery method is obviously dying due to the USPS not being able to manage costs effectively and shifting the burden to their customers however Netflix needs to do a better job of providing newer movies via streaming before they neuter their DVD service.

[John]

I have the same question as most here. What about Blu-Ray. I only get 1 disc so it doesn't hurt going up one buck. However, if they drop the extra in place of the new pricing then this increase is sweet.

Either way I am not ready for their web only offer; mainly due to their failure to actually do their 28 day option. I have things in my queue that are newly out and past the 28 day curfew and still no stream option on them. Go figure!

[Mr X]

Karen, in "Your Account & Help", click "See membership terms & details". My grandfathered membership shows:

* The price of your 4 DVDs out at-a-time (Unlimited) plan will change to $19.99 (plus any applicable tax) a month starting with your next billing period on or after Jan 02, 2011.

* You are currently in the 4 DVDs out at-a-time (Unlimited) plan with unlimited time to watch instantly.

* Your current period price is $16.99 plus any applicable tax.

[Perkins Cobb]

"We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet." -- Reed Hastings

A tragedy for people who actually care about movies. So now, if I'm using the 8-out plan, it's going to cost me $56 + whatever they charge for Blu-ray access + tax? So, upwards of $75 a month ... AND I still can't rent the latest season of C.S.I. or THE OFFICE on Blu? Screw you, Reed. I'd love to tell you to stuff your price increase and your dwindling DVD/BD library ... but of course, I can't, can I, because you've stomped out the few brick & mortar stores that Blockbuster didn't kill off.

Look, I get it that streaming is here to stay. Maybe one day the file sizes (and my bandwidth situation; and the studios' willingness to provide remastered transfers instead of pan & scanned TV masters from 1985) will reach a point where I'm actually enthusiastic about it. But in the meantime, Netflix is abandoning its customers who prefer physical media, and possibly even putting a nail in the coffin of Blu-ray as a high-end niche medium.

Reed's quote above marks the end of a golden age of home video.

[Stone]

Sigh, I wouldn't mind the price increase if they didn't charge extra for Blu-Ray. And since that format has become the defacto standard I can't believe their excuses for the extra fee.

Now might be the time to switch to the streaming only plan and use Redbox exclusively for movies. (I tend to watch a lot of first-run flicks.)

[TZ]

crybabies,

you're still getting a great deal no matter which plan you're on.

[Sue]

For the last few months my family & I have been slowly cutting back on spending time in front of the blue glowing box. I've been on the fence about cutting back Netflix to the 2-disc option at the start of the year. Thanks Netflix for pushing me to make a decision. Happy holidays to all!

[Carolina hiker]

I gotta agree with the "crybabies" poster above. The 3-disk plan at 19.99 is still a great bargain. We watch at least ten movies a month, which comes to about $2 each. You can hardly go to the movies once for $19.99!

[Benjamin]

I went to billing history and I viewed membership details. That is where I received the notice that my plan was increasing. If I go to change my plan, I see the message this plan is no longer offered if you make changes you can't get old price (thus a lot of people believe they are grandfathered in, but I think they are not)

[Rob]

Less competition equals higher prices. As I said on another topic,someone has to pay for the millions,their shelling out,for the right to stream. I think we'll see regular increases now that Blockbuster or Walmart Isn't a threat. Someday we may all be reminiscing on how Netflix was once a great entertainment value,just like cable once was.

[TheCrow]

I dropped down a plan already. You don't raise prices in this economy unless you add something to it.

[cj]

Your plan is no longer offered
You are currently on the 1 DVD out at-a-time (Unlimited) for $8.99 plan which is no longer offered. If you select a new plan, you will no longer be able to return to this plan.

Does it means that my price will not go up?

[Jamie]

I think they are making everyone pick their new plan so nobody can say that they were not aware of the price change. I doubt anyone is "grandfathered" in to stay at the old rates.

Come on people we all saw it coming when the streaming only for 7.99 started leaking out and they said you could add a 1 disc at a time to it for $2 more. If $1 additional a month is your breaking point then I really wonder how much you got out of the service to start with. I started when there was no streaming, now I have over 200 items in my instant queue, is that worth $1 a month to me? Heck yeah.

[Matt]

@Perkins Cobb: Couldn't agree more. People who care about movies are subsidizing the viewing habits of people who want quantity over quality. After all, it's Netflix, not Netfilms.