Prices for rent-by-mail will rise, an indication the company is pushing subscribers toward its $7.99/month higher-margin streaming video services.
By Antone Gonsalves November 22, 2010
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Netflix has launched a streaming-only video subscription service in the United States and has raised the price of its combined unlimited streaming and rent-by-mail service by $1.
In launching the streaming-only service, Netflix said Monday subscribers were watching more content streamed over the Internet than on DVDs delivered by mail. Analysts expect Netflix eventually to drop the rent-by-mail service for the higher-margin streaming service.
Netflix launched the latest offering two months after launching the same service in Canada, which was successful enough to convince the company to begin the service in the U.S. The price in both countries is $7.99 a month for unlimited streaming.
In announcing the streaming-only option, Netflix raised the price of its combined unlimited streaming and rent-by-mail service by $1, to $9.99 a month. For that price, subscribers can only have a maximum of two DVDs out at one time. Plans that allow more videos to be taken out at one time have also been increased from $3 to $8 a month, depending on the number of videos a person can rent at one time.
The new prices go into effect immediately for new subscribers and in January for current members.
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