Netflix is changing its retail service plans, launching separate "rent DVD" and "streaming" plans. Among the new plans are "DVD only" plans, offering the lowest prices ever for unlimited DVD rentals and priced at $7.99 a month for the "one DVD out at-a-time" plan and $11.99 a month for the "two DVDs out at-a-time" plan.Netflix also is separating "unlimited DVDs by mail" and "unlimited streaming" plans, allowing users to choose a streaming-only or a DVD-only package, or subscribe to both.
At the same time, Netflix is ending its current plans that offer both unlimited streaming and unlimited DVDs by mail.
The current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans, plan one offering unlimited streaming (no DVDs) for $7.99 a month, and Plan two offering unlimited DVDs, one 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.
Netflix says the plans reflect a new understanding that some subscribers want DVD-only access, while others want streaming-only or mixed access. Most significantly, DVD-only customers seem to be a significant percentage of the customer base.
"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," the company says.
People generally are not happy about the change, but you could have guessed that reaction. Some 1800 comments so far on the post, here: http://blog.netflix.com/.
The issue is whether the changes have any noticeable effect on subscriber acquisition or retention.
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