It has only been one day since Netflix announced their new plan for division of their DVD rentals and streaming. However, many users are so hot about the huge price increase they have threatened to drop Netflix and vow to look for other ways to get their content to watch.
Netflix claims that due to continued cost increases they were unable to continue the combined business model they had been using; instead, they opted to move to a pricing model that separates the DVD rentals and content streaming. Previously, subscribers would pay for monthly DVD rentals and the streaming was thrown in as bonus, so to speak.
With the new pricing that will become effective in September, customers who want both DVD rentals and streaming will be forced to play $7.99 for DVD rental and $7.99 more if they also want the streaming, for a total of $15.98 per month. This is a 100 percent price increase, and many are complaining that the company is just being greedy. While we expect Netflix to lose some subscribers who will seek other options, the big winners could be those like Redbox and Hulu Plus, and maybe even the local independent video store (that is, if you are still lucky to have one of those around).
The latest from Netflix indicates that the company is still talking tough and seems to have no plans to re-think its new pricing strategy. We will have to wait till the next earnings report to find out how much real damage was done by this decision.