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Netflix separates streaming and DVD plans

Netflix has announced today that it has separated its DVD and streaming services, which means if you want both, the price just increased substantially.
1-DVD-at-time unlimited plans will cost $7.99 per month, the cheapest it has ever been, but if you want unlimited streaming you will need to pay an additional $7.99. For just $9.99, you’ve been able to get 1 DVD by mail at a time, and unlimited streaming.

The plan is now effective for new members and will become effective for existing members on September 1st. Netflix has 24 million subscribers in the U.S. and Canada and is set to expand to South America and Mexico later this year.

The company explains its move:

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.

Now we offer a choice: Unlimited Streaming for $7.99 a month, Unlimited DVDs for $7.99 a month, or both for $15.98 a month ($7.99 + $7.99). We think $7.99 is a terrific value for our unlimited streaming plan and $7.99 a terrific value for our unlimited DVD plan. We hope one, or both, of these plans makes sense for our members and their entertainment needs.

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