“Netflix Carnage” Via Ross Catrow on Flickr
Netflix dropped a bomb on its plans today, splitting the unlimited streaming and DVD-by-mail plans into two distinct memberships.
The current $9.99-a-month-plan for unlimited streaming and unlimited DVDs will be split into two distinct plans:
Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.
The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.
While it doesn’t work out too well for “hybrid” Netflix users (they’ll be paying almost $6 more), there’s a new option for those who’ve never had any interest in streaming. For the One-DVD-Out-At-A-Time Plan, Netflix will charge $7.99 a month. For the Two-DVDs-Out-At-A-Time Plan, it will cost $11.99 a month.
As for those who have the streaming only plans, there will be no change. Still $7.99 a month.
So, why the change? Here’s what the Netflix blog had to say about it:
“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.”
Netflix will also be creating a distinct team to hand the DVDs-by-mail portion of the business, led by Andy Rendich, the company’s Chief Service and Operations Officer.