Netflix Price Increases Take Effect Thursday
Customers who use streaming video and get DVDs by mail may see 60 percent price hikes.
Netflix's long-planned price changes went into effect today, meaning the company's many customers who subscribe to the $9.99 a month plan for one DVD and unlimited streaming will be seeing a 60 percent price increase.
In July, Netflix announced it was phasing out the $9.99 a month plan in favor of two separate plans: one for unlimited streaming for $7.99 a month and one for one DVD at a time for $7.99 a month. Customers were notified by e-mail that unless they actively made a change to their subscriptions before September 1, they would be enrolled in both plans.
A survey in July of nearly 1100 Netflix users by Wedbush Securities found that 22 percent planned to cancel their Netflix subscriptions and migrate to Hulu, Redbox and Amazon's streaming video service.
Other companies that have been struggling recently, like Blockbuster, are jumping at the chance to scoop up new customers. The company sent out taunting tweets such as "Dear Netflix, we’re offering special prices & 30-day trials of Blockbuster Total Access to your members."
And rumors abound that Amazon, which bought the European version of Netflix, called Lovefilm, at the beginning of 2011, may be planning to migrate the service into the U.S. sometime soon.
It's still too early to tell how Netflix's price hike will affect the company, but comments like this one from @eliasdylan may leave executives nervous: "After 5 yrs I have canceled the disc part of my #netflix account. Don't think streaming will live up to Blu-Ray. Might cancel all next month."