Why I'm keeping Netflix, even after the dumb price hike

Netflix used to offer a $9.99 subscription plan that allowed you one DVD at a time as well as streaming, both unlimited. That plan is now $15.98, after the company split its DVD and streaming offers up into two cheaper plans. No bones about it, this is dumb (and I'll tell you why), but despite that using Netflix for me just got cheaper.

No, this isn't some clever after-the-jump joke about how Netflix got cheaper for me because I'm leaving the service. I will remain a subscriber. For the time being, anyway.

Netflix: Then And Now

Let's break it down. Before the price hike, Netflix had three main subscription options: a super cheap, two-DVDs-a-month plan for $4.99 monthly (still exists); the unlimited DVD-streaming combo for $9.99 a month that was most likely the company's most popular (axed); and combo plans that offer an increasing number of DVDs out at a time — all with unlimited streaming — starting at $14.99. Now, the last of those — the DVD-streaming combo plans — are all more expensive.

After yesterday's announcement, Netflix has introduced a cheaper plan for supporters of physical media with as many DVDs as you want a month (provided you're okay with getting one at a time) for $7.99. This is the same price as a streaming-only option the company instituted last November. The confusing thing here is what's happened to most basic DVD-streaming option, the one that used to be $9.99. Netflix has literally added its two lower tier options together and ended up with the awkward fee of $15.98.

You can sign up for the new plans now, but current subscribers have until September 1 to decide.

Reactions To The Change

If you ask Netflix, the new pricing comes after a surprise realization "that there is still a very large continuing demand for DVDs," according to the company's VP of marketing, Jessie Becker. Becker added: "treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs."

If you ask the Internet, well... It isn't good. Becker's post about this change on Netflix's official blog has since received over 6,750 comments (and is steadily getting more). It's hard to find a positive one in the bunch. Our fellow tech blogs, too, are lighting up with everything from incredulity to saying goodbye to Netflix.

As for myself, Netflix just got cheaper to use. As someone who was on the $9.99 unlimited DVD-streaming plan, paying an extra two bucks for DVDs made perfect sense to me. Paying double? Not so much. I barely see a physical disc in a year from Netflix, never mind a month.

Under the new pricing, I've dropped down to the streaming-only plan for $7.99. Technically, it means that using Netflix is now cheaper for me, and canceling doesn't make complete sense — yet.

Here's the danger: now I'm at the mercy of Netflix's streaming catalog by itself, without the option to pad it out with a disc if there's something I really want to see. If Netflix doesn't have something? Well, I'll be looking at Crackle, or Amazon, or iTunes and so on. Just like that services that were always my back-ups could now become part of my regular routine, and their pay-as-you-go pricing (Sony's Crackle is free, supported by ads) could make more sense than shoveling money into Netflix's coffers and getting nothing back.

Either way, Netflix as a service has gone from necessity to "under review."

How Netflix Can Fix This

That $9.99 DVD-streaming plan was definitely my sweet spot. The promise of what it offered was the value. Now, Netflix — a company which seemed like it could do no wrong (maybe because it did no wrong) — is in the terrible position of having something to prove. That virtual value is gone.

You've got to wonder, though — is there no space for a DVD-streaming plan? Under the old system, Netflix just pushed out whatever disc was next on your queue.

How about this: bring back the cheap DVD-streaming option, make it $10, and either give folks a limited number of DVDs a month, or make it so that users can request a DVD if the movie is not available for streaming. I'd pay $9.99 for that again. Hell, I'd pay $12. $15.98? Well, that math just doesn't add up for me.

Hopefully this isn't the death knell for unlimited streaming in the near future. It'll be interesting to see if this shakes out as a good thing for Netflix, or if pay-per-view services make a serious comeback.

Where do you stand? Does your Netflix usage drop you into one of the cheaper buckets, or are you stuck paying more money for nothing more in return? Let us know down below.

Image via Folly and Innovation

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