Netflix Announces Streaming Only Plans and Higher Prices for DVDs

micsaund writes "While Netflix has continued to drop fees and still maintain a good services, today, they take three steps in the other direction by doubling the cost of the plan you probably already have: 'So for instance, our current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans ... Unlimited Streaming (no DVDs) for $7.99 a month ... 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).' Now, if they could get everything available on streaming, this would be fine, but how many times have you needed to get a physical disc for that oddball movie, or had a movie in your instant queue that magically disappears due to some behind-the-scenes contract expiration or whatever?"

Comments

Can't get premium TV without basic TV

[tepples]

For $9 a month I can get HBO/Showtime from my cable company

My cable company won't even let me subscribe to HBO or Showtime until I already subscribe to a $80/mo bundle of other channels that I don't watch.

Blame the content makers

[jcdick1]

The estimate is that in 2012, Netflix's license fees will go from $180 million in 2010 to $1.98 billion in 2012, according to this.

Its going to be very hard for anyone to become the legal clearinghouse for media at a price point most consumers see as reasonable because the studios won't allow it.

Re:Blame the content makers

[rsmith-mac]

Bingo. We all knew this was coming, it was inevitable the moment Netflix made it big and people started unsubscribing from cable/satellite.

The studios originally licensed content to Netflix believing they were an end of the line service - a place for content to go once every other method of squeezing out profit had been exhausted. Instead people stopped buying DVDs, stopped buying $3 episodes off of iTunes, stopped buying Video On Demand, etc. So instead of extracting the last few pennies out of their content, the existence of Netflix has been severely undermining more profitable viewing methods. The studios aren't charities of course and want what they believe they should be making (or to put it more appropriately: they strongly believe in price discrimination), which means if viewers are going to use Netflix as they currently are then Netflix will have to pay more for the right to deliver their content. There's no such thing as a free lunch.

Finally, the next step will be for the studios to license their content to a Netflix competitor for cheap for a short period of time, similar to what the RIAA did with Apple & Amazon. The purpose will be to try to diminish the influence of Netflix, as a large independent content delivery company is going to squeeze the studios on profits. The end result will be that none of the content delivery companies will have enough leverage to use against the studios, leaving the studios in complete control of pricing.

Dear Content Providers

[Tailhook]

I'm not going back. You'll have to live with some fraction of the cut you got for cable/satellite service, whether via Netflix or some other distributor. Streaming is the a la carte that should have been available 20 years ago. I will not pay for a package full of dreck. Pull whatever you want. I'll live with whatever is left over. You're not getting back to $70/month. Deal with it.

You need to adopt this attitude as well. These people need to take a few pay cuts.

Re:Redbox...

[bdleonard]

Basically, this will drive people to use Redbox for disc-based movies and NetFlix for screaming.

I use Wilhelm for all of my screaming ...