Netflix price increase raises monthly fee 60%, splits DVDs by mail, Instant Streaming

Written by Matt Swider on July 12, 2011

News: New Netflix plan, which will have Instant Streaming/Blu-Ray subscribers paying at least $17.98 a month, starts September 1.

It had to happen sometime, but did Netflix really have to raise its prices 60% in one fell swoop? That question is being echoed on social networks, in comments and throughout forums today, following the Los Gatos-based company's announcement that it's splitting DVDs by mail and Instant Streaming services. It's yet another sign that Netflix is desperately trying to focus on the cheaper streaming service and nonchilantly ditch the more expensive shipping process that comes with the DVDs-by-mail service.

The soon-to-be-non-existent combined base plan for both has been $9.99 ever since Instant Streaming was introduced in 2008. The jacked-up price is now $7.99 a month for one DVD at a time and $7.99 a month for Instant Streaming. It goes into effect today for all new subscribers and starts on September 1 for existing members.

This gives all current Netflix subscribers just 19 days to alter their plans before owing a shocking $15.98 a month. The ill-informed are sure to be taken aback when reviewing their credit card statements the following month. Furthermore, that $15.98 month fee doesn't tell the whole story, as many subscribers have opted to receive multiple DVDs at a time. Netflix has long called the three-DVDs-at-a-time option its ?most popular? plan, which now has a price of $23.98 a month. Worse, many subscribers, especially PS3 owners, pay $2 extra for Blu-Ray discs - a surcharge that adds another $1 to each additional Blu-Ray in a plan.

My $11.99 one-Blu-Ray-disc-at-a-time and Instant Streaming plan, for example, is now going to be $17.98 - if I chose to keep Netflix. So far, the Internet blowback has indicated dissatisfaction with the Instant Streaming selection, which users say pales in comparison to the newer releases seen throughout the DVD and Blu-Ray menus. With alternative services like Amazon Prime Instant Video, which is free to all Prime subscribers, Netflix alternatives are going to be highly sought-after over the next couple of weeks.