Video Distribution Darling Netflix Raises Its Rates

Netflix is raising its prices by as much as 60 percent for millions of subscribers who want to rent DVDs by mail and watch video on the Internet.

The company is separating the two options so that subscribers who want both will have to buy separate plans totaling at least $16 per month. Netflix Inc. had been bundling both options in a single
 package, available for as low as $10 per month.

New subscribers will have to pay the new prices immediately. The changes take effect Sept. 1 for Netflix's current customers.

Netflix isn't changing the $8 monthly price for an Internet streaming-only option, which the company began offering late last year. But instead of charging $2 more for a plan that also offers one DVD at a time by mail, the company will charge $8 for a comparable DVD-only plan. That brings the total to $16.

"I think it's worth it because of what you're getting for your money," said subscriber Hayley Polmanski. "But the increase itself is slightly rediculous."

Those who want to rent up to two DVDs at a time with streaming will pay $20 per month, or 33 percent more. Those wanting three DVDs at a time with streaming will pay $24 per month, or 20 percent more.

When Netflix unveiled the streaming-only option, it also raised the rates for its most popular DVD rental plans by $1 to $3 per month. Those plans included unlimited online streaming too, as had been the case since Netflix began sending video over high-speed Internet connections in 2007. That means longtime subscribers who want both entertainment options will get their second price increase in eight months.

Social media sites were screaming with complaints.

But Netflix has its fans, and industry insiders think it will weather the storm, as the company increases the cost of its popular mail plus online option from $10 to $16 per month.  

"I don't see Netflix going out of its way to apologize," said Alex Ben Block of the Hollywood Reporer. "It's a business decision."

And with its legions of loyal fans, Netflix apparently figures most of them will be understanding.

Copyright AP - Associated Press
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