Netflix Adds Streaming-Only Plan, Raises Prices Across The Board

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Netflix announced Monday it will add an unlimited streaming-only DVD plan to its packages, but will also be raising subscription plans as well.

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The online DVD rental store has never offered a streaming only option, but the company said they are seeing that more people are preferring to skip physical DVD rentals for watching videos instantly online. “Our selection of TV episodes and movies available to stream has grown dramatically, and as a result most members want us to deliver unlimited TV episodes and movies two ways: streaming instantly over the internet plus DVDs by mail. The price increase will allow us to continue to offer the popular plan choice of unlimited TV episodes and movies streaming instantly along with unlimited DVDs. The new plan, which does not include DVDs, is a great option for the increasing number of members who only want to watch instantly,” said VP Marketing Jessie Becker on the Netflix Blog.

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As for the other rental plans, they will be increasing as well. The most popular plans – the 1 DVD out at a time and the 2 DVDs out at a time – will be going up $1 from $8.99 to $9.99 and $13.99 to $14.99 respectively. The other options see a more steep increase ranging from $3 to $8. Current customers will see the price increase on their bills on any billing date after January 2, 2011. New customers will pay the updated prices today.

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Netflix added that they will not be offering a DVD only plan, because most of their customers prefer to have the online streaming option and they expect that traffic to continue to grow. “Creating the best user experience that we can around watching instantly is how we’re spending the vast majority of our time and resources. Because of this, we are not creating any plans that are focused solely on DVDs by mail,” Becker said. The $7.99 streaming only plan should compete directly with the recently unveiled $7.99 Hulu Plus plan. About 20 percent of the online video store’s library is available instantly which is similar to the size of Hulu Plus’ collection, according to All Things D.

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