announced major changes to its plans today, including a significant price increase.
Netflix has now split the pricing for DVDs and instant streaming into two different plans, where previously they have been combined. The effect, for those who currently subscribe for one DVD at a time, is approximately a 60% cost increase.
Those who have the simplest DVD plan, one DVD at a time plus streaming, have currently been paying $9.99 plus tax. To maintain the same level of service, a subscriber would need to subscribe to get one DVD at a time for $7.99 and then subscribe to the streaming plan for an additional $7.99. That comes to $15.98, totaling over $17.20 with tax here in California.
The changes take effect September 1st.
Based on wording at my account on the Netflix website, it looks as though initially DVD subscribers will be charged for two plans next month: "The price of your Unlimited Streaming + 1 DVD out at-a-time (Unlimited) plan will change to $15.98 (plus any applicable tax) a month starting with your next billing period on or after Sep 01, 2011."
Those who wish to cut back will need to take the initiative to do so by clicking on "Your Account" and then "Change Plan."
There's lots of discussion about this change at Hacking Netflix.
Update: Here's thoughts from Jennifer Garlen.
Late Update: Cliff has very interesting comments at Immortal Ephemera. I think he's right, I'm surprised Netflix isn't offering some kind of discounted combination plan -- it would take the sting out of what is otherwise a 60% increase, before factoring in the additional taxes.
Every business raises prices at some point, but this huge increase combined with recently declining customer service doesn't quite sit right. For instance, how about Netflix recently making all customer reviews anonymous, what was that all about? Then there's the ever-growing number of worn-out DVDs they're neglecting to replace...are they really recommitting to their DVD mail service? I guess we'll find out the answer to that if unavailable "Saved" titles start moving back into the queue. Or if they don't.
Wednesday Update: Stacia comments on the price increase at She Blogged By Night.
Update: There's more information and analysis from the Los Angeles Times.
Diane shares the angst of a longtime subscriber at Classic Movie Blog.
I also agree with a comment in this Washington Post story: why did I get the official email from Netflix a full business day after learning the news elsewhere?
Wednesday Evening Update: Many thanks to my friend Jill for sending links to a commentary from Consumer Reports and an accompanying chart comparing Netflix with other options.
Update: Netflix asserts the company was prepared for the backlash and accepts it: "These are our prices."
Thursday Update: More on why Netflix raised its prices in such a startling fashion from the New York Times. It's clear as mud.
Netflix asserts there's a silent majority who think the new price is "a good value."