Hi Bryan Here….

So yesterday, Netflix announced it will be raising their prices by 60% for their service.  If you currently have the service that includes streaming + 1 physical disc, then you might know that your price has risen or will rise from $10 to $16 per month.  Netflix has written the whole explanation on their blog which you can read below.

First, we are launching new DVD only plans. These plans offer our lowest prices ever for unlimited DVDs – only $7.99 a month for our 1 DVD out at-a-time plan and $11.99 a month for our 2 DVDs out at-a-time plan. By offering our lowest prices ever, we hope to provide great value to our current and future DVDs by mail members. New members can sign up for these plans by going to DVD.netflix.com.

Second, we are separating unlimited DVDs by mail and unlimited streaming into separate plans to better reflect the costs of each and to give our members a choice: a streaming only plan, a DVD only plan or the option to subscribe to both. With this change, we will no longer offer a plan that includes both unlimited streaming and DVDs by mail.

So for instance, our current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.

The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.

Why the changes?

Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering. Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix.

Now we offer a choice: Unlimited Streaming for $7.99 a month, Unlimited DVDs for $7.99 a month, or both for $15.98 a month ($7.99 + $7.99). We think $7.99 is a terrific value for our unlimited streaming plan and $7.99 a terrific value for our unlimited DVD plan. We hope one, or both, of these plans makes sense for our members and their entertainment needs.

Now  I completely think the reasoning they give is completely BULLSHIT.  They are basically just doubling their profits for no reason.  Maybe the CEO’s need a new house.  Who knows?  But I for one will be changing my subscription plan to only streaming.  I really want to cancel it all together, but I do know Netflix has gotten in to the original programming game and plan to release through their service a couple of new original shows.  One that stars ‘Mad Men’ lead John Hamm.  Also, Netflix has purchased the rights to ‘Wonder Years’.  Those are two reasons right there why I will keep the service, but I will be reducing my monthly payment by $2.  I know Netflix said there is still a huge demand for physical discs, and yes there should be.  Their streaming service isn’t the best and there is really a lack of good titles thru streaming.  But I wonder if this is a ploy to get more people to move over to streaming.  I for one will always support physical copies to downloadable content.

Your thoughts?