Netflix Inc. (NFLX), the online and mail- order movie rental company, raised prices by 60 percent for U.S. subscribers who want both services, citing the costs to acquire and deliver films and TV shows.
Netflix will no longer offer a $9.99 package of DVD-by-mail and unlimited streaming, the company said in a statement today. Instead, more than 23 million subscribers will pay $15.98 monthly beginning Sept. 1 if they choose both options, or $7.99 for just one.
The company introduced a DVD-only plan for $7.99 on July 8 for new subscribers and extended that to current customers to reflect the costs of acquiring and delivering content digitally and by mail, Steve Swasey, a Netflix spokesman, said in an interview. Many customers want the option of streaming-only or DVD-only packages, he said.
“We wouldn’t have charged this when the streaming catalog was still lean,” Swasey said. “The streaming catalog is robust to the point where a lot of people won’t want DVDs anymore.
Current monthly subscriptions featuring both unlimited DVDs and unlimited streaming is $9.99.
Marketing vice president Jessie Becker cites a "very large continuing demand" for DVDs as reason for the separate subscriptions.
"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," says Becker in the post.
So far, general reaction among commenters of the Netflix post has been negative, with many questioning whether the company will bolster its catalog of streaming films and television shows.
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