Netflix splits streaming and DVD into separate plans, meaning many users will pay more

Netflix members will soon find themselves faced with a tricky dilemma: to stream or not to stream? The video-streaming and DVD-by-mail company announced Tuesday that it’ll be splitting its streaming and DVD services into two separate plans. One plan, an unlimited streaming-only option, will cost $7.99 per month. The other plan, an unlimited DVD-only option, will also cost $7.99 (for one DVD out at a time). Members can enroll in both services for a combined rate of $15.98 per month.

For Netflix users who currently stream movies and receive DVDs by mail, this new pricing scheme represents a steep 60-percent increase in monthly costs. Previously, Netflix offered a $9.99 plan that provided both unlimited streaming and unlimited DVDs (with one disc out at a time). Now these members will have to choose between keeping both streaming and DVDs for an increased $15.98 per month, or cutting one of the services to bring their monthly dues down to $7.99. The revamped pricing plans are effective immediately for new subscribers, and on or after Sept. 1 for current members. Blu-ray discs still carry a surcharge — for the one-DVD-at-a-time plan, it’s an extra $2 per month.

In a corporate blog post, Netflix claimed that the creation of a separate DVD-only plan was a way to reassert its commitment to DVDs. “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,” wrote Jessie Becker, Netflix’s marketing vice president. “Since then we have realized that there is still a very large continuing demand for DVDs. 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.”

How current members respond to the new plans will depend on whether they considered Netflix primarily a DVD service with the added benefit of streaming, or primarily a streaming service with the perk of receiving DVDs. A visit to Netflix’s home page quickly reveals where the company is placing its chips. The site extols the wonders of instant streaming; only in the “Frequently Asked Questions” section does Netflix mention that, oh yeah, we also ship DVDs. A separate site, DVD.netflix.com, exists for those interested in the DVD-only plans.

Netflix users will also have to decide between the larger library of DVD titles and the instant gratification of streaming. My queue, for instance, contains a total of 61 movies. Of those, 57 are available on DVD, but only 22 are offered via streaming. As someone who prefers the guaranteed high-def crispness of Blu-ray discs — to my eyes, HD streaming usually appears a notch inferior — I’m anticipating that I’ll opt out of the streaming plan. But I will definitely miss the ability to browse Netflix’s ever-growing streaming library and instantly start watching some acclaimed drama from Kazakhstan. Or maybe I’ll cave in and pony up the $17.98 a month (including $2 for Blu-ray) for both streaming and discs. After all, $17.98 is still less than what I shelled out to watch Transformers: Dark of the Moon in IMAX 3D.


Comments (246 total) Add your comment
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  • Jess

    As a netflix customer who got the e-mail with this news today, I have already decided to drop the streaming part of my plan. Why chose from their limited selection of instant movies when I can rent what I want on DVD. I’m also disappointed in such a steep price increase. I already dropped from three movies to two and now I’m dropping the streaming so they just keep losing my money!

    • Tom

      If Netflix would simply open themselves to a much wider market by ditching this stupid DRM proprietary limitations, so anyone that has flash enabled Internet browser can watch streaming video, they would easily double their revenue. Take android for example.. If I can’t watch netflix on my android devices or my non-drm enabled game console, then no wonder they are having to raise their rates. They are going the wrong way.

      • Sarah

        No, they are raising prices because licensing content is about to get a lot more expensive for them. Most of their licensing deals are set to expire next year, and with new competitors offering streaming, all of a sudden the studios have a lot more bargaining power. Netflix’ costs for online content are projected to increase from $100M+ a year to $1B+ a year in 2012. No wonder they are freaking out.

      • thin

        Probably also worth mentioning that the DRM restrictions are imposed by the studios’ licensing agreements rather than by Netflix’s choice. Hulu has the many of the same problems for the very same reasons.

      • Jay

        @Tom: Just so you know… you CAN stream Netflix to your Android device. I do it all the time. I have an HTC Evo and it streams those Netflix movies beautifully

      • J. Baker

        I couldn’t possibly short Netflix stock fast enough.

      • John C.

        All Androids are supported. Download the app. Not hard. Just one more thing for people to complain about. Internet is everywhere….so simply stream the movies, or opt out. Stop complaining. Seems that all people do anymore. There’s so many positives in the world….time to focus on that, instead of people saying that Netflix is a mandatory expense – it’s a luxury. If you have to cut back for financial reasons, you shouldn’t have Netflix. If you are cutting back to protest Netflix’s price increase – go for it, but as mentioned, it’s the studios charging Netflix, not Netflix gouging the customers. And why are any of you complaining. There were no complaints walking into Blockbuster and paying 4.99 for a movie rental. That’s WAYYYY higher than Netflix. Go positive. Be happy. Live well! :)

    • jenna

      I also dropped from 3 to 2 dvds when they hiked the prices last year, disappointed that I have to make another decision! I don’t stream nearly as often since what I have in my queue is not available on instant! Only 55 out of my 160 title long queue are available on instant. seems like netflix could’ve done a bit more thinking when dividing up the plans!

      • TM

        Like many of you I have been a netflix member since 2002 and last year went down to 2 DVDs from 3. While I have been streaming a lot more than ever, the streaming is very limited and you cant see any of the DVD extra features. Hopefully Amazon or Wal-mart will come out with a rental program similar to Netflix and give us an option.

      • Sockgal

        I switched from four DVDs out at a time to two last year when Netflix upped it’s prices. We use the streaming and DVD options equally. Streaming is cool, but the library gets old very quickly. Sometimes movies are completely taken off streaming. Only a few newer movies are even available to stream, unless you want to see thousands of straight to video crap. If Netflix could just offer all movies to be streamed, that would be solution. But as of today, very few watchable titles are available as far as top movie choices.

      • Michelle

        90% of the stuff they have for streaming is currently running on Showtime and Starz. I’m canceling on August 31st.

      • NayeliAyala


        REDBOX — here I come!

        After all, the Netflix streaming model is overpriced as it is!

        Your choices for streaming are limited to a few shows and a handful of movies — most of which are made-for-TV or B-movie status.

        Yeah, if Netflix doesn’t change their mind about this, they are effectively hammering the nails in their own coffin. Someone else will rise up and charge less.

        Like I said, Redbox is looking more and more appealing.

      • John C.

        Netflix doesn’t dictate material. It’s the studios. If there are so many complaints, call the studios releasing the movies. They are the one’s controlling the DRM and play management of the movies – not Netflix. Netflix is simply an interface, per say, to access the movies. A brilliant company. They simply manage their website and use other people’s content. Brilliant!

    • Lisa

      I dropped the streaming as well.
      But I did up to the additional DVD (3 instead of 2). Previously when they hiked the rates, I dropped from 3 DVDs to 2 and had the streaming. As I told the CS rep, why pay for streaming when I can still watch those shows on Hulu (or DVD) for no extra cost.

    • Alienate

      I just did a similar move. I reduced from streaming and 2 Bluerays, down to 1 Blueray, no streaming. I actually save money as I rarely stream their crappy selections. Plus, when I watch a movie I want BLUE RAY HIGH DEF in my theater, not that streaming lower-def crap. Thanks! Netflix, for making me save money!

    • Crystal

      Still a great deal. I watch about two DVDs per week (new plan=$2 a movie) and many instant streaming selections on top of that. I still call that a steal and won’t be canceling.

    • Pat

      I’m 70 years old, on social security, and do not have all the fancy “gadgets” younger people do. I have enjoyed getting movies in the mail, and just got a blue-ray player for watching Netflix movies on tv, that was a waste of money, because now I will be cancelling the streaming and just getting one movie in the mail. My budget is very limited. Thanks, Netflix for disappointing an old lady.

    • Kristie

      I agree with you Jess, I went from 3 DVD’s to 1 plus streaming and now I’m on the fence about rental. Why pay $7.99 for a DVD to sit in my house for a month when I can go to RedBox, VUDU or In-demand?

  • Jason

    This kind of sucks at a time when so many people are hurting financially.
    Netflix should know that they have SO much business BECAUSE they’re so inexpensive. They’re counting on people keeping both – I would think in the long run people are going to choose one or the other, and they’ll end up losing out.

    • Asha

      I’m not really willing to pay $8 a month more so that I can continue getting 3 or 4 DVDs a month. I can get them from the library for free. I’ll pick my instant Netflix until they jack the price up on that too.

      • Carrie

        I agree. I like the DVD option for unique (typically older) films that aren’t streaming, as well as new releases, but, as you say, many of them are available through my library or Redbox. I use Netflix primarily for TV series, so I’ll probably switch over to streaming only. Bummer, though, having to make the choice.

      • Cyndi

        Agree with you Asha. My kids stream TV shows on Netflix all the time. For us, the DVD usually sits on a shelf for a couple of weeks before we get around to it. Not worth the extra $8/month when the library, Redbox and even cable On Demand service is available for the few movies we do watch.

      • Heather P

        Yep. We use the streaming content a lot. I’d be a lot happier if they had the same stuff on streaming as they do on DVD. Our DVD queue only has a dozen items on it. Mostly HBO shows.

        Come September, we’ll get DVDs from Redbox.

    • Big Walt

      I feel like existing customers should be grandfathered in or at least given more time. At least we get until September.

      I’m with everyone else though, why stream and be limited if you’re going to chose?

    • John C.

      Well consider that this is a luxury. Where has society changed that streaming movies online is a needed expense. It’s to spend the extra dollars on. One person on here mentioned that they were struggling paying their mortgage and are furious that Netflix up dated their prices. What are you doing with Netflix in the first place?! This, my friends, is why we are in a recession. People have no personal responsibility to financial obligations and the full circle has hit. Take responsibility for yourself and your finances. Netflix doesn’t demand you subscribe. You choose to do so and throw a fit when the prices change. Shame on you. Shame. They are a business. If you were CEO of Netflix, guess what, you would want as much profit as well. As a business owner, I LOVE to please my customers and stay competitive, though bottom line is profit. If that’s not there, then the company fails. People go into business to make money. Think.

  • Hillary

    Streaming is great if you have kids or want to catch up on tv series and older releases. When it comes to new releases you’re have no choice but to go with the DVD membership or stick with your local red box.

    • Jess

      I agree – we love the streaming for the kids. We’ll be dropping the mail DVDs and keeping streaming. It’ll have to be red box for new releases.

      • Cajo

        That’s exactly what I’m debating too…

  • Tanya

    It completely baffles me how they’re disregarding customer loyalty and common sense. Let’s increase people’s current rates AND give no discounts for both services. Really? No incentive to stream AND have DVDs? In today’s economic climate, most of us will choose one or to cancel entirely. And this makes business sense…how??

    • Josie

      Agree 10000%!

    • Darrin

      That was my thought exactly – how about a damn discount if you get both? Though my cable co. rips me off, at least they give a discount if you get tv, internet and phone, instead of charging full price for all three.

    • Tia

      I thought that to. Netflix is raising my cost by 23%, the least they could do is offer a small discount to ‘bundle’ my services. My cable company does it.

      • Matt

        It’s probably even more than that. I have the 2-disc plan (dropping from the 3-disc when those prices went way up – you’d think they would have taken note of how many people did that before raising rates drastically AGAIN) and it’s going from $15 a month for me to $20 if I keep the same “plan.” That’s a 33% increase. That’s a LOT. I’ll drop to the one-disc plan, if I even decide to stay, but even that will be a dollar more! I hope this decision hits them hard – unless we’re getting something out of it, which we don’t seem to be, it’s really a bad move.

      • Halena

        I agree Tia. I think they should do a discount bundle.

    • David

      Because customer loyalty is worth jack when your profit margin disappears and investors start fleeing like rats from a sinking ship. There’s been a lot of ink spilled in the business press over the past week about the studios hiking the license fees for Netflix streaming. Which leaves Netflix with the choice, raise prices in order to cover the higher cost of content or start losing money hand over fist.

    • Matt

      No, it’s because greedy movie studios are going to demand more of the pie from Netflix in a year – didn’t you read the comment above? Netflix does not have the capital like Amazon or Google, to stay competitive they will need to do this. So if you pick just dvds or just streaming, your bill probably won’t change that much, so I think it’s the best possible way for them to cope with having to pay a greater share to the movie studios. If anything, I’m thinking of sending letters to Sony et al., telling that I’ll boycott their films if they bully Netflix. THEY’RE the ones ruining it for the consumer.

    • AmandaK

      You DO get a discount if you are choosing the higher plans! We pay $55 a month currently, and it is dropping to $51. People want to complain about this….but look how much you pay for cable!! We cut off cable 3 years ago, got the unlimited plan through netflix, and just signed up for hulu plus (7.99/month) for newer shows. Way cheaper in this economy!

  • Juke Early

    Don’t panic… at least for net bandwidth challenged locations, this will be a reduction in fees for disks. Considering I’d been paying for streaming I could NEVER get—this is a great deal.

    • Ana

      I don’t know what makes you think they’re going to reduce fees at all. They have no incentive to do such a thing, especially since it probably costs more to ship dvds. Personally I don’t know what I’m going to do. I realize that $16 is still cheaper than cable but I’m not prepared to pay twice what I was already paying.

      • Joe

        Ana, his point was that people who didn’t steam before were forced to pay $10 when they only used to pay $8. Now the price goes up sure, but its saving people like me money who can’t stream and didn’t like their costs going up for no reason. I quit Netflix because of this, and might go back that they finally, and smartly, separated the two.

      • Brittany

        Well Joe that is great for you, but your whining about paying $2 less is costing the majority of Netflix subscribers a 60% increase. I don’t care how much this is saving people like you, because this is going to cost me so much more than the previous plan cost you.

  • Kaye

    I’ve been with Netflix a long time, and I’m undecided about what I’m going to do. While the streaming library is growing, there are still a lot of movies and tv shows that are only available on DVD. Using my Wii, I use the streaming option more frequently, so I may head in that direction.

    • Jason

      This. There just isn’t enough on streaming to justify JUST streaming. New releases are few and far between. There are so many old movies and tv shows NOT on streaming. Some tv shows that are on streaming have episodes you HAVE to have the disc for. What is THAT about?

      • Jenny

        You’re right, Jason. There isn’t near as much available on streaming. I feel like I need to drop something (hello, Netflix most of us aren’t getting pay raises in this ecomony) come Sept so I guess it’ll probably be the streaming.

      • c

        at this point, I’ll go with the DVD’s. The streamining options are not that great. The last time I signed up with Netflix, they raised the price, so I dropped them. Now this . . . while I understand the reasons, it doesn’t justify paying the extra dollars each month.

  • mmm

    I’m going to drop the streaming service and, if anything, up from 1 dvd at a time to 2. (which is cheaper than 1 dvd at a time plus streaming) It wasn’t a terribly hard decision to make. There isn’t a ton of streaming stuff I want to watch (although I have watched a lot that I enjoyed). There is a ton of stuff I wish I could watch on streaming and is available but I can’t watch because I have enough of a hearing loss that accents (including British) are too difficult for me to make out without closed captions and my Roku does not support closed captions.

    I kind of think Netflix sucked us in with low/affordable prices and now that we’re hooked, will sock it to us little by little.

  • Alisha

    I’m from Canada and our netflix SUCKS, I would gladly pay the money to get both services PLUS getting better stuff than what I get here

    • Sara

      I was excited when they came here because I was going to drop my Zip.ca subscription entirely, but Netflix is the worst. They have the worst selection and we don’t get huge download limits like the Americans, so streaming isn’t ideal for me. Their suckiness also took the pressure off Zip.ca to provide streaming, so I’m just sticking with my subscription for the time being.
      There’s also the fact that our prices up here are ridiculous compared to the US. I’d kill for an unlimited plan of ANY kind for only $15!

      • Lyndsey

        Download limits?!

      • Heather P

        Download limits? I think you may be misinformed. We have no limits.

        I’m curious though, I’m aware Canada only has streaming. How much does Netflix charge for streaming for you guys?

  • Kate

    I think this decision will come back to bite them. I think they assume a lot of people will stick with both, but I think instead more will choose to keep only one or the other based on their need. I will keep streaming because I rarely have time to see things when they first come out anyway, so it’s not a big loss to wait til it is available for streaming. I like that with streaming I can watch whatever I feel like on a given day, whereas the DVDs may sit around for awhile until I feel like watching whatever came.

    • Nicole

      Agreed.

    • Jason

      Disagreed. :) This would make sense if you really could wait until most movies come out on streaming. But most movies *never* come out on streaming. The streaming selection is just too small.

    • Sara

      Exactly – I’ve had the same dvd for weeks, I wouldn’t mind just going to streaming only.

      • robin

        same here – most of the DVDs I can get free through my local library, if I’m willing to wait. Streaming is a nice way to pass the time when I’m waiting for a DVD to come through – and they do have a good selection of documentaries and TV shows. I’m sticking with streaming for now.

    • John C.

      They are NOT banking on people staying with both. Look at their website. It’s all about Streaming. You have to search to read about DVD rental information. This is their plan. To cut shipping and operating costs in warehouse and stocking. As a business move, it’s brilliant. They still offer the DVD rentals, but it’s not their priority anymore. Amazon started out as a book seller. That became antiquated market, and have revised their business model over and over to stay current. You have to alter your plan of action or you sink, and I say Netflix is right on target. They still offer DVD rentals, but the structure now encourages streaming, hense lowering their cost and affording to make more material current. It’s very smart business. Way to go Netflix.

  • RyRyNYC

    I’m probably going to drop Netflix all together – I liked that it was inexpensive and I can sometimes go without watching anything from them for weeks on end so to pay 60% more for services I rarely use… hmmm, don’t think so.

    • caroline

      I’ll be dropping them also. Not interested in paying more.

      • John in Fort Myers

        Been with them since the beginning, and did nothing but praise thier efforts until now. I just canceled my membership.

      • ana riley

        I agree.

    • christy

      I agree. I liked that they were inexpensive and I didn’t have to deal with driving to town the next day to return the movie. I wasn’t happy with the last increase and now it will cost me over $20.00 to keep my same plan. Figure come the end of August we will be done with Netflix.

  • Joe

    I love the convenience of streaming, but the selection of movies/tv shows available through streaming is a joke. I’m going to cancel the streaming part for sure. I’ll save some money each month and Netflix will lose money in the process. Great strategy Netflix! NOT

    • PSac

      Same here. It will be interesting to see if their revenue drops from this. Could be a big hit to the company.

  • CeCe

    Yes, of course, Netflix. I totally believe that it’s all about benefiting the customer and not about benefiting Netflix. Arbitrary, unnecessary price increases are the best way to keep customers!

    • Eric

      No joke. Why not give us the option to keep our current plan? That or drop one of the features for $7.99. Nah, cause you’d lose money “taking care of your customers.”

      • Luziana

        Although the netflix thing is rellay a good idea the rest of the update are stolen sounds for the wii and the PS2. why did they steal the mii idea from wii. Why are you trying to turn my xbox into a kids station. I dont believe that xbox should be competing with the wii have they not taken a good look at some of the horrible titles that are out for the system. Have they not taken a long hard look at the gimick controls. sure the wii is selling more systems but those systems are sitting on shelves collecting dust.

    • Big Walt

      The price increases are hardly unnecessary but it does stink.

  • Jay

    Bye Netflix. Hellooo Redbox!
    Epic fail Netflix. You tried to push customers into streaming-only, but didn’t do anything to improve your lousy instant streaming selection.
    I cancelled my membership.

    • Dustin

      My thoughts exactly!

  • Eric

    Netflix, you’re pushing it. You’re going to start losing people soon. Your competition is about to get bigger and I’ve no loyalty to you; you jack up my prices I’ll jump in a heart beat.

  • Amy

    I am really annoyed by this honestly. I use streaming more to watch old series (FNL, BSG, Buffy, Arrested Development) but also use the DVD option for shows not streaming like Fringe, The Good Wife and new movies. I hate that they are making us choose or pay more. It really isn’t fair.

    • Tia

      I agree. It is like they did no consumer research into how we use the service before hiking up the rates.

    • Pash

      Totally agree! I think they need to get a wider streaming library before they try to force this issue. I tried to watch Dexter yesterday and they had removed it from the instant stream! Ugh! Frustrating! The majority of things I would use Netflix for are TV shows and they have very little streaming or just a season here or there. Luckily our local library has a wide selection of DVDs and I can just switch back to “renting” from them.

    • BrandonK

      Agreed…I’ve watched most of the old “Murder, She Wrote” eps and “Monk”, among other things. I still need DVDs for all the shows and movies that aren’t on streaming, though! Now that their early success has basically killed video stores, I guess they have us over a barrel. I’ll be dropping streaming, but the great thing about it was that you could often find things you might like to try out, without having to commit to a several-day turnaround with DVD. For instance, I watched several documentaries that I probably wouldn’t bother getting on DVD. Ah, well.

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