Netflix to hike prices

Netflix currently offers customers both streaming and DVDs in one package, but customers will soon be paying more to have both, Netflix announced in its blog today.

Unlimited online streaming will continue to cost $7.99 per month, while monthly fees for DVDs only cost $7.99 for one disc at a time, to $11.99 for two at a time. To get both at a time, the price will simply be double – 60 percent more than current prices, paidContent pointed out.

The change goes into effect immediately for new subscribers, but existing subscribers won’t pay more until Sept. 1.

Netflix launched its $7.99 unlimited streaming plan in November 2010, and at the time, DVDs by mail cost an additional $2 when added to the plan.

Netflix explained that the changes are to “offer a choice” to subscribers:

“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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