Netflix Raises Rates

Many subscribers are deeply unhappy with the increases

By Beth Stebner
|  Tuesday, Jul 12, 2011  |  Updated 11:30 PM PDT
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Celebrity Brainiacs

AP

Netflix is now offering two new plans -- streaming only or DVD only, or a combined membership for $16.99, increased 60% in price.

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It’s an uneventful Tuesday afternoon, and you’ve just got the mail, happy to see a vivid red envelope peek out of the sea of bills and postcards. Netflix is here!

Excited, you pop the DVD in the player (no one needs to know your obsession with “All Dogs Go to Heaven”). As you wait for it to load, you check your email and see something disheartening: a message from Netflix announcing new plans and (gasp!) price changes.

And then you see it: “Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into two distinct plans”: Unlimited Streaming for $7.99 a month, or one out at-a-time, no streaming for $7.99 a month.

Both plans will cost $16, a 60% increase from the previous plan. Other plans are increasing $1 to $3 a month.

This adjustment is “the latest step in a long-term transition toward becoming a next-generation premium television business,” according to Arash Amel, who is a research director for HIS Screen Digest. He told The New York Times that Netflix has flourished by making hundreds and hundreds of titles available online, not by delivering DVDs by mail.

After the announcement, Netflix users took to social media to voice their complaints. Many said they would most likely opt for the new streaming-only plan.

Some protesters vowed to leave Netflix for one of their competitors—Hulu, Amazon, and Apple all offer premium downloads and packages.

Amel says that Netflix users should expect prices to rise further as Netflix pays millions in licensing fees for new television shows and movies.

Selected Reading: NYT, AP

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