Netflix to raise price to stream

[Mad Old Lu]

Netflix to offer unlimited DVD plan, raise price to stream too

Netflix is launching unlimited DVD-only plans in the U.S. -- but as a part of that move, it's scrapping unlimited plans that include physical DVDs and online streaming.

Subscription movie rental service Netflix said Tuesday that the changes are meant to "better reflect the costs" of each option. The changes cut prices slightly for customers who want only DVDs, but streaming video will cost extra. Customers who want both will essentially have to pay for two plans, raising their overall bill.

Netflix's unlimited streaming-only plan will remain $7.99 a month, while its "1 DVD at a time" plan will also cost $7.99. So customers who want both will have to shell out at least $15.98 a month.

That's a big jump from the $9.99 a month customers pay for a plan that offers unlimited streaming plus 1 DVD at a time.

The changes take effect immediately for new customers and Sept. 1 for existing members, Netflix said.

The move comes as Netflix continues to shift its focus toward streaming video -- an option that, while popular, costs Netflix loads of cash.

Netflix introduced streaming plans in 2007. Since then, the service's membership has climbed to 23 million from 6 million in the U.S.

https://www.chicagotribune.com/busi...-price-to-stream-too-20110712,0,1835731.story

Wow, that sucks! Looks like no more streaming for me. Just going to stick with my one-at-a-time plan.

Interesting the article says that the streaming costs Netflix loads of money, but I would think that would be its most cost-effective plan. They just digitize the movie and that's it. No mailing, no manpower to do any of the shipping and handling, no warehouses. I guess it's paying for the servers--but would it really be that expensive? They barely have that many movies in streaming anyway.

 

[karamazov80]

Funny, I recently got Netflix again after going without for awhile due to the $10 per month for that deal. I'll probably reconsider now. Though their streaming option could be better, I've still been able to find lots of movies and documentaries to watch on it, and the quality is fantastic.

 

[ProgMatinee]

Curious to see if the multiple dvd packages increase as well. Right now I think I pay about $22 a month and compared to the $100 or so a month I pay for satellite its a steal. Wife and I probably watch 12+ dvds a month plus tons of streaming. We definately get our monies worth. Hate the increase but I'd rather have about 4 months of unlimited tv viewing for $120 than a toy.

 

[jutty]

I wouldnt mind paying the increased price IF all the new movies that are released are available for streaming.
Its annoying when they show NEW MOVIES FOR STREAMING..... and there old crappy ones.

 

[Mad Old Lu]

Funny, I recently got Netflix again after going without for awhile due to the $10 per month for that deal. I'll probably reconsider now. Though their streaming option could be better, I've still been able to find lots of movies and documentaries to watch on it, and the quality is fantastic.

So funny that you mention the documentaries. I noticed that as well--lots of documentaries available for streaming. And TV shows as well. In fact, I watched season 2 of Better Off Ted on Netflix, which is not out on DVD.

But they still seem to keep the mainstream current movies on hold for a while at least.

 

[praxitas]

I just read an article yesterday that the price will be a lot worse in the next couple years. Apparently all of their contracts with the big movie studios will be up and they are going to have to pay probably 10X what they were under the previous contract. I will look for the article and post a link because it was pretty interesting.

 

[ProgMatinee]

Why would anyone buy the dvds if you can have infinate access to them via Netflix streaming?

Netflix streaming is like HBO. Do you see brand new movies on cable?

Studios do want to sell DVDs and Bluray. :shock

A subscription to stream totally brand new movies would be like $80 a month.

 

[tomandshell]

Streaming selection isn't worth the price. Doubly not worth an increase.

 

[praxitas]

Found it - https://money.cnn.com/2011/07/08/technology/netflix_starz_contract/index.htm?hpt=te_bn6

NEW YORK (CNNMoney) -- In the not so distant past, Netflix was known mainly for its red envelopes. The DVD-rental-by-mail service was the company's core, and streaming video was a side perk for subscribers. Fast forward to 2011, and online movies and TV couldn't be hotter. Google, Amazon, Hulu and others have jumped into the fray -- putting studios in the power position. They want to be paid more for the content they're providing. That spells trouble for Netflix's streaming content costs. "Netflix has another year or two on most of these contracts, and then the game completely changes," says Michael Pachter, analyst at Wedbush Securities. Pachter predicts Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012. When streaming video was new, Netflix was able to secure contracts with the likes of Warner Bros. Studios and MTV to license big TV and film catalogues for about $5 million to $10 million per year. This time around, Pachter says, those costs could increase more than tenfold. "The content owners realize they can't give Netflix all the leverage," he says. "Netflix had the power when they were the only bidder. But you don't have as much leverage when you suddenly have competition." Netflix expands to 43 new countries Netflix subscribers got a taste of the studios' new hardball approach last month, when hundreds of Sony (SNE) movies -- including high-profile titles like "The Social Network" and "Salt" -- abruptly vanished from Netflix's "watch now" catalog. In a blog post, Netflix pinned the blame on a "temporary contract issue" between Sony and Starz, a pay cable network that licenses Sony's movie catalog. Back in 2008, Netflix struck a four-year deal with Starz that gave it streaming access to Starz' offerings. But Starz' deal with Sony included a cap on the number of subscribers who can watch Sony movies online, a source told the LA Times. Once Netflix' audience exceeded the cap, the contract was null. Starz' catalog of Disney movies available for online streaming is on the verge of triggering a similar contractual cap, the newspaper reported. In a letter to shareholders earlier this year, Netflix called the Starz arrangement "one of our most important deals," because it's one of the few that gives Netflix access to relatively recent films. The deal runs through early 2012, but the Sony/Starz standoff could accelerate the renewal talks. "Studios are starting to put their foot down," says ThinkEquity senior analyst Atul Bagga. "They weren't paying attention to streaming at all, but now they see an opportunity to monetize. And they're going to take it." That's a big threat to Netflix. On the other hand, the company has the money and motivation to spend more to keep its rapidly growing subscriber base happy. "The cost of content is going to go up, no doubt about it," Bagga says. "It's going to come down to who has the ability and the willingness to write big checks. Netflix is probably the one to do it." Netflix (NFLX) had a $161 million profit last year on sales of $2.2 billion, and it ended last quarter with $342 million in cash on hand. But Netflix's rivals have much bigger wallets. At the end of the first quarter, Amazon (AMZN, Fortune 500) had almost $7 billion in cash, and Google (GOOG, Fortune 500) had a whopping $37 billion. In another bit of uncertainty, Netflix's most direct competitor, Hulu, is on the block. Walt Disney Co. (DIS, Fortune 500) Chief Executive Robert Iger said at a conference last week that Hulu's owners -- who include Disney -- are "committed to selling" it. The list of interested potential Hulu buyers includes Google, Microsoft (MSFT, Fortune 500), Amazon, Yahoo (YHOO, Fortune 500) and nearly every other tech giant, plus telecoms like AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500). Landing Hulu would give any of them a strong beachhead for challenging Netflix. Right now, no one else has cracked the code. Netflix's global subscriber base grew almost 70% over the past year, to 23.6 million users. In contrast, Google's movie offerings on YouTube and Amazon's streaming catalog are still new and fairly paltry compared with Netflix's arsenal. "Netflix is the first and the biggest," Bagga says. "In a broad sense, the rivals aren't competing with each other. Everyone is competing with Netflix." But if this turns into a clash of titans, Netflix is still a small player battling much larger and richer giants. "Netflix is merely a conduit," Pachter says. "Of all the people who want to be in the business -- Google, Amazon -- they're smaller by far. The big boys will take share of subscribers, or bid up the cost of content. Either way, Netflix loses." To top of page

 

[Kabukiman]

They just added a ton of new stuff to streaming on the 1st. I was Netflix's biggest fanboy. Netflix giveth and Netflix taketh away.

 

[ProgMatinee]

In the end, I think the studios will simply offer direct to consumer streaming. You don't need a middleman to relay big movies to the consumer. You just need a network connected bluray player and point to the right address.

That works for all the big movies. Charge people $3 a viewing or whatever.

The question is, how many people use Netflix to see all the movies that they normally would not pay to see?

That's the type of customer I am. I want to take a flyer on a film I might not like because in the big picture of watching over 100 movies a year, the cost per movie is quite minimal.

I see though that a lot of people on this forum are simply concerned with the latest films. In which case, simply going to Redbox or something is the better deal.

 

[Kuzeh]

Well, if they are going to increase prices, they better release better titles more often on streaming...
We'll see...

 

[Mad Old Lu]

Ah, I see. The high cost is in the licensing. It looks like this price hike is the result of the price hike on licensing coming in 2012. This is probably a first step.

I don't really use streaming anyway, just every once in a blue moon if I'm working and I just want to have something playing in the background. I just hope the physical DVD rental prices won't go up (too much).

 

[The Josh]

Never been too tempted to get Netflix and even less if they're jacking up the price. I'll stick to buying the Blu ray releases that I want in my movie collection.

 

[Kamandi]

I'm glad there's no contract. This blows. I've been getting irritated at the age of the films in Netflix instant, but the DVD mailer made it easier to excuse.

There's Apple, Amazon, Hulu, and Blockbuster offering online streaming and bigger catalogs. I might have to consider a switch.

 

[jutty]

jacking up the price. I'll stick to buying the Blu ray releases that I want in my movie collection.

Think that might be the road ill be going down also...( told the misses i wanna hit my 200th blu ray by xmas..she not too thrilled )

 

[MachineGunMan]

I stream so much stuff for me and the children... they are streaming as i type this... and the quality and selection are continually getting better, always thought it was such a deal and too good to be true... apparantly it is

 

[Kamandi]

Youtube has also been making deals with studios.

Netflix does not have this market to itself. Raising prices will only make people realize there are alternatives.

 

[TheObsoleteMan]

Streaming selection isn't worth the price. Doubly not worth an increase.

Damn straight! Most of the stuff I want to see on there isn't even available to stream. I sure as hell ain't paying more for that.

 

[The Josh]

Think that might be the road ill be going down also...( told the misses i wanna hit my 200th blu ray by xmas..she not too thrilled )

Nice! I don't have that many but I have several now with all the movies I like.