Netflix Changes Pricing Model–Are You Outraged, or Resigned?

Netflix Changes Pricing Model--Are You Outraged, or Resigned?


Image courtesy of

I guess it’s like the old truism: it depends on how you look at it.

Yesterday, Netflix announcing a new pricing plan.  Here’s how the Netflix marketing folks put it to me in an email:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $17.99 a month membership for unlimited streaming and unlimited DVDs (including Blu-ray access) will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs (including Blu-ray), 2 out at-a-time (no streaming)
for $14.99 a month

Your price for getting both of these plans will be $22.98 a month ($7.99 + $14.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

On the one hand, anyone who didn’t see the writing on the wall late last year when Netflix added a streaming-only option, while raising prices on every other option,  to their menu of choices was fooling him or herself.  The first thing I thought when I saw that announcement last year was, “Yup, they’re trying to phase out the DVD mailing end of the business.”  Which makes sense from a business perspective, right?  Which is cheaper; keeping thousands (millions?) of DVDs in various warehouses all around the country, and paying all that postage to ship them back and forth?  Not to mention the costs for the envelopes, and whatever people and equipment are required for running that business.  Or just having a massive bank of servers and a team of IT people, and beaming out electrons on demand?

I mean, really, it seems pretty obvious.

On the other hand, the hard facts are that if you have a one DVD at a time plan and want to keep it, you just saw your price jump by 60%!  And if you have a two disk at a time plan, it jumped by 33%.  No matter how you slice it, those are enormous price jumps.  I have seen a lot of outrage about it on various boards, along with a whole bunch of folks insisting that the outraged people have no sense of perspective.  But my side is on that of the outraged, personally, for two reasons:

First, a huge price hike is a huge price hike, period.  Particularly in the face of a really, really crappy economy.  “Nibbled to death by ducks;” “being nickled and dimed to death”; “death by a thousand cuts”; and other cliches jump to mind.  Yeah, yeah, yeah; what’s six bucks a month, right?  I’ll tell you:  it’s another six bucks!  Your wages are flat, and have been for decades; gas is up over 4 bucks a gallon; the banks are dinging you for every friggin’ fee they can think of; cell phone companies are thinking up phantom fees; and one of your avenues of entertainment is going up by 60%?  Jeebus, what else do they want; my blood?

Second, the current selection on Netflix streaming is less than optimum.  This is anecdotal, obviously, but it seems like every time I want to watch a movie via streaming, it’s only available on DVD.  Yesterday I thought it might be fun to re-watch “Annie Hall”.  Nuh-uh; DVD-only.  Okay, maybe a heist movie, like “Ocean’s 11”?  Nope.  TV show like “Cowboy Bebop?”  Sorry, mate.  I finally found “Accidental Tourist”, but I swear to you I had to go through quite a few other choices first to get there.  (“The Italian Job”? Nope.  “Casino Royale”?  Nope.  “The Bourne Ultimatum”?  Nuh uh.  “The Transporter”?  Sorry . . .) No, it’s like cable all over again–it’s not what you want, it’s what they make available.  And so far, Netflix [or the movie studio] hasn’t made it available.  (And what is the logic behind having one film of a multiple film series available, but not the others?  Nutty!)

(I’m not even going to go into the endless trouble I’ve had getting decent quality on my streaming movies.  If I watch them on anything other than a laptop, they look like crap, and that’s a fact.  At home, on the road . . . it doesn’t matter.  And I’m not going to watch something that looks like crap when I can rent a blu-ray and have awesome quality, nosir.)

So:  Netflix is raising their prices.  A lot.  What do you all think about it?

As an Amazon Associate, we earn from qualifying purchases. If you are shopping on Amazon anyway, buying from our links gives Gear Diary a small commission.

About the Author

Gear Diary Staff
Gear Diary was founded on September 30, 2006, with the goal to create a website that would not easily be labeled. Everyone who is part of Gear Diary is a professional who uses technology in their work and daily lives. On this site, we share our enthusiasm while exploring the gear we use — the equipment that makes our lives easier, more entertaining, more productive, and more manageable. Our hope is that Gear Diary visitors find this site to be a welcoming, friendly, and accessible place to learn about and discuss interesting topics — and not only those that are tech-related! Gear Diary is a place to discover and explore all kinds of new gear, including smartphones, computers, kitchen gadgets, Toys, EDC, camping gear, or even your next new car! You can follow us on Twitter @GearDiarySite.

8 Comments on "Netflix Changes Pricing Model–Are You Outraged, or Resigned?"

  1. I am no longer a netflix subscriber, that’s what I am.

  2. stevenshytle | July 14, 2011 at 11:11 am |

    Annoyed. I will not pay more than $10, so I will be dropping the DVD option as it was used the least.

  3. No matter what, it’s still a great deal. Their explanation for the cost increase doesn’t wash, really, but who does this better?

    However, I am hardly using the DVD service at all, so I may just drop it and just do watch on demand. If the price increase did anything, it forced me to do this. Of course, it would be nice if they offered everything streaming that they offer on DVD…

  4. Heatwave316 | July 14, 2011 at 3:36 pm |

    We tend to forget all about the DVDs we get in the mail, and they sit for months. I’m thinking we might just cancel Netfix with the increase. I think we rent more via Comcast.

  5. swisspotluck | July 14, 2011 at 5:34 pm |

    I no longer have Netflix. If I did, I suspect I would fall on the outrage side of things. It does seem like cable all over again. There isn’t anything I want to watch so bad I can’t wait for it to come in at the library (I live near one, thankfully.)

  6. I’ve come close to trying out Netflix in the past free internet TV/movies weren’t cutting it. This price increase pretty much just guaranteed that I never will bother with Netflix.

    I currently spend around $24-25 per month on rentals at a traditional video store. I also have an Amazon Prime membership. I bought it mainly to take advantage of the quicker shipping, but it also includes a relatively small selection of free movies and TV shows.

    Otherwise, everything I watch is on Hulu or some other online service for free, and Netflix has moved from something I might consider to something I won’t consider.

  7. Christopher Gavula | July 15, 2011 at 12:03 pm |

    Personally, I never rent via DVD so this increase doesn’t me in a very tangible way, but I can understand the annoyance and anger that others are feeling. The interesting thing here is that I have NO television, no cable TV service, no satellite – these Internet-based services are the only way I obtain “content”. So I use Netflix, Hulu, Crackle, etc. regularly and consistently. The problem is that NONE of them individually have a very complete “set” of anything – their libraries are all limited, but together they make up an acceptable (but not great) library of content. So for many people like myself, I suspect if it impacted us the answer would be “suck it up”, because all of the alternatives (cable tv, satellite, etc.) all cost a LOT more a month (and give you more in many ways, but nothing more in others).

    What I find interesting in all the complaints is that no one mentions that Netflix / Hulu Plus are both under $10 a month for streaming content, but we are being asked to pay almost the same (starting at $5 and going up) for streaming music service! That hardly seems reasonable to me, but people don’t seem to complain about it. Go figure!

  8. jelliott25 | July 17, 2011 at 8:25 am |

    I’m really torn on what to do. I feel the price increase is too much all at once. Perhaps it is what is needed to balance the books for netflix, they are under pressure from studios after all, but I still have limits on what I can bear. We have a dedicated room for movies with a projector and a large screen so getting bluray is important for what we call “event” type movies. I don’t want to buy bluray though since we rarely watch a movie more than once. We also watch a fair amount of netflix streaming in the bedroom when we can’t find anything on Uverse which is close to a hundred dollars a month by itself when you tack on all of the extra fees for the various HD packages that are necessary in order to get all of the available HD channels. If I can find a redbox near me that has bluray, I’ll probably go streaming only on netflix and just make a trip to the store for the bluray stuff.

Comments are closed.