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Netflix Increases Prices for Streaming with DVDs by Mail

Netflix announced new a la carte pricing for its movie rental services, separating out the costs for streaming only plans and DVDs by mail plans. The new pricing structure comes down to a price increase if you use both streaming and DVDs by mail services. However, a new DVD-only plan (no-streaming) will be offered in the U.S. at their lowest price ever — $7.99 a month for the 1 DVD out at-a-time plan and $11.99 a month for the 2 DVDs out at-a-time plan.

Netflix says these changes better reflect the costs of each service and give members a choice: a streaming-only plan, a DVD-only plan or the option to subscribe to both.

With this change, Netflix will no longer be offering unlimited plans that include both streaming and DVDs by mail. The unlimited streaming plan will remain at $7.99 a month. The price for getting both unlimited streaming and unlimited DVDs will be $15.98 a month ($7.99 + $7.99).

For new Netflix members, the changes will be effective immediately. For existing members, the new pricing will start for charges on or after September 1.

Netflix Streaming

Current customers paying $9.99/month membership for unlimited streaming and unlimited DVDs will need to choose a new plan:

  1. Unlimited Streaming (no DVDs) for $7.99 a month
  2. Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month
  3. Unlimited DVDs, 2 out at-a-time (no streaming), for $11.99 a month.
  4. Combine any option above, for $15.98 ($7.99 + $7.99) or $19.98 ($7.99 + $11.99)

What Does it Mean
The new ala-carte pricing means means you’ll likely pay $6 more per month than before for the same service, or you could save $2 per month by cancelling the part of the service you don’t need.

Why the changes?
The Netflix blog stated:

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Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. 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. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering. Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix.

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