Netflix Price Change Goes Into Effect Today… And Why That Is A Good Thing (Updated)

Posted Thursday, September 1st, 2011 03:01 pm GMT -4 by 0

Netflix packageThis past July, Netflix announced that it would be changing the pricing plans for its customers in September. Well, here we are at the beginning of September and the changes are upon us. Until now, Netflix customers have been getting unlimited DVD rentals and unlimited online streaming video for $9.99-per-month. Starting today, those two services have been split into separate subscriptions. Now, you can get unlimited DVD rentals OR unlimited online streaming for $7.99-a -month each. If you want both services, it’ll cost you $15.98-a-month.

When the price change was announced in July, sites around the web began calling it a 60 percent price increase and many Netflix customers began to whine and complain on Facebook and Twitter that they were being ripped off. In truth, the change isn’t a price hike at all. It’s just that Netflix has finally started charging for something that it’s been giving away for free.

Yes. If you want both services, you’ll be paying more than you were yesterday. However, until today, unlimited streaming has been FREE with every subscription to Netflix’s unlimited DVD program. When I began subscribing to Netflix many years ago, I got unlimited DVD rentals for $9.99-a-month. Four years ago, when Netflix began adding streaming video to their subscriptions, I continued to get my unlimited DVDs and now had commercial-free streaming video as well… without a single price increase! How cool was that!? But I knew it wouldn’t last. Someone has to pay for servers, license fees, and advertising.

Since the addition of streaming, Netflix’s business model has rapidly changed from a primarily physical DVD-based service to a mostly streaming service. You can now watch Netflix Instant on your computer, your smart phone, your game console, a Roku box, or any number of DVD/BluRay players. And, despite a lot of complaints about overall selection quality, the number of movies and television shows on Netflix Instant has been steadily increasing. Now that streaming has become Netflix’s main product, it has decided to end the ‘beta test’ phase and work towards making it the sole service for the company and I, for one, support the move.

Why would I support something that would potentially cost me more? Well… when Netflix streaming began, I continued to get the $9.99-a-month service but I found that the DVDs that I’d get were sitting on a shelf for months before I’d watch them. It was so much more convenient to turn on my Xbox or Roku and watch something without messing with finding a disc. When Netflix announced the price change, it was a no-brainer for me to drop the unlimited DVD plan in favor of the streaming-only option. I didn’t feel like I was getting ripped off at all. I just figured that Netflix had finally moved to the next logical step in their business.

However, now that Netflix is actually charging for their streaming service, I expect that they can afford to get the licenses for more recent films and television shows. Despite all the initial complaints, that is the true benefit of this whole price change. Sure. I love watching the cheesy Syfy Channel b-movies but, since I am now paying for the service, I do feel like I’m entitled to my money’s worth. If that doesn’t happen, well… I might join the rest of the allegedly 22% of customers who have dropped Netflix in favor of other services like Hulu Plus and Amazon Instant.

UPDATE: Shortly after the price change went into effect, Starz announced that it has cancelled it’s contracts with Netflix for instant streaming. Starz controls much of Netflix’s newer content including movies from Disney and Sony. An inside source claims that Starz asked Netflix to pay them 10 times the licensing fee that was paid in 2008. Netflix offered over $300 million a year to renew the contract but Starz declined. What this will mean for Netflix remains to be seen.

  • http://www.sciencefiction.com Patrick Ruddell

    Honestly I was going to bash you for liking the price increase, but it makes sense. Hopefully the increase will help their inventory. In the mean time though, I’ve put my account on a 90 day hold to see what changes come. If nothing I’ll cancel and be on my way, like you to Hulu or something else.

  • http://twitter.com/janicekay_ Janice Cantano Kay

    With the amount of other streaming services available, Netflix better be getting up to the minutes movies that can’t be found on other free sites.Why pay for this service if you can get it somewhere else for free?

    • http://www.hydeandgeek.com Scott

      The difference is that most (if not all) free sites are ad-supported, meaning that you have to watch commercials before and sometimes during your streaming. I will gladly pay the $8 to not have to watch commercials. Ugh!

  • http://www.sciencefiction.com Patrick Ruddell

    I just read that Starz is ending their streaming deal with them in February. This is not a step in the right direction!

    • http://www.hydeandgeek.com Scott

      I wonder how much of the Netflix lineup is Stars. It doesn’t seem like a large percentage. Maybe this will force Netflix to start signing up to get their own streaming rights.

      • http://www.sciencefiction.com Patrick Ruddell

        I’m sure Torchwood fans won’t like this. I’d say Camelot too, but that show was cancelled.

        • http://www.hydeandgeek.com Scott

          Honestly, I don’t remember ever watching a Starz television series. A few of the movies I watched were part of the ‘Starz Play’ line of films but not enough that I’d miss them.

      • Anonymous

        they have over 1000 streaming titles including Sony and Disney. Losing Starz is a huge blow to Netfilx, but honestly Camelot stunk and Torchwood has been horrible at best. Other than Spartacus what good original series has Starz ever produced? They are silly to lose the Netfilx revenue stream, because whenever you go to cancel or have a problem DirecTV they give you Starz free for like 6 months, so the content can’t be that valuable.

  • WilliamJPope

    Thank you for making me realize I was getting something for free when I was paying 10 bucks a month for it already :P