Netflix announced that they are changing their pricing structure for their DVD rentals. For those Netflix members who only stream videos their price will remain at $7.99 per month. However, the cost for unlimited DVD rentals will raise to $7.99 per month for one DVD out at a time. Previously, unlimited DVD rentals were considered a $2 add-on to the movie streaming membership.
With this cost increase, a combination of a physical DVD rental membership and a streaming video membership shoots from $9.99 to $15.98. At almost $16 per month, the annual subscription fee jumps to over $190 per year. Many members continue to rent DVDs to supplement the classic titles in the instant streaming library with new movies that are not available to stream.
It is no wonder that the 80% of Netflix's members that have combination memberships are up in arms about the price hike.
Netflix's Price Hike May Open the Door For Other Streaming Movie Services
The price-increase backlash from Netflix members may have negative affects on Netflix's hold on the subscription movie streaming market. It could open the door for other companies to compete with Netflix. Amazon Instant Video already offers a free streaming service to its Prime customers. Still, Amazon only has 5,000 movies available to stream for free to its Prime members. The Hulu Plus subscription service is also $7.99 per month and has a number of movies --including the Criterion classic movie collection--to supplement its huge current TV show episode offering.
Satellite TV company DISH Network is using consumer's dissatisfaction toward Netflix, to promote their service by informing people of their recent purchase of Blockbuster. In a recent emailed press release, DISH hints that they may be ready to jump at any opening in the market stating that they are "exploring ways to expand into this platform."
While the Netflix instant streaming service does not offer as many titles as its DVD rental service, it is still a larger movie and TV library than any of its competing streaming services. Also, the cost for the streaming service has not increased from its $7.99 per month fee. At this price, it is still a bargain compared to other online rental services-- Vudu, iTunes, Amazon Instant Video -- that charge at least $1.99 to $3.99 or more, for a 24 to 48-hour rental period.
If another service can make deals with movie studios and TV networks to offer a large library of current titles for instant streaming, it could pose a serious threat to Netflix by luring disgruntled users. Although Netflix members complain about the available movies and the new pricing, they may have to wait for a viable alternative.
Update 9/18/11:
Netflix Stock Tumbles Following Prediction of One Million Subscriber Loss (TV Predictions).Cast a vote for your favorite movie and streaming service in my poll.