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Netflix Increases Streaming Focus With Disc-Free Service Option In U.S.
Netflix Increases Streaming Focus With Disc-Free Service Option In U.S.
November 22, 2010 | By Kyle Orland

November 22, 2010 | By Kyle Orland
More: Console/PC

Netflix today announced a new streaming-only subscription plan for U.S. users, including those who stream through major video game consoles, and pledged to devote more of its resources to licensing streaming content.

The new streaming-only plan comes at the lowest ever monthly cost for Netflix service -- $7.99 a month -- reflecting the lack of DVD shipping costs, according to a post on Netflix's official blog.

Netflix plans that include DVD rentals by mail will increase in price by at least $1 a month, according to the company. The new pricing for these plans will go into effect immediately for new users, but not until January for existing users.

In a press release, Netflix said the current financial quarter has seen users watching more content over internet streaming than on shipped DVDs. As such, the company said it will be investing more money in acquiring licensing rights to streaming content than to acquiring DVDs in the current quarter.

"We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet," said Reed Hastings, Netflix co-founder and CEO.

Netflix has offered a streaming-only service in Canada since September, and said today it plans to further expand its international offerings in the coming year.

This January, Netflix attributed much of its healthy subscriber growth in the previous year to the launch of its streaming service on the Xbox 360, PS3 and Wii systems.

Earlier this year, analyst Michael Pachter estimated that offering Netflix streaming services on the Xbox 360, Wii and PS3 will earn the company 3 million new subscribers in 2010.

The service was used by 3 million Wii owners alone, as of October.

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Lo Pan
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It is a real shame that they increased the DVD/Blu-Ray rental fee. Netflix is starting to act like Time Warner...every year a new cost increase for the same level/quality of service. Btw, Netflix the overwhelming majority of US citizens don't have broadband and don't even know what streaming is...just sayin.

Hayden Dawson
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That's not just a Netflix issue. The video game publishers and console producers are going to need to also understand the market just is not ready for an all dl world.

Jed Hubic
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It's not really a price increase for the same level of service. In more people are using streaming content than disc service, they are probably making less (or maybe losing money) on that service and thus the price increase.

There are factors like a recession as well. Rather than lose money on a lesser aspect of their service, raising rates keeps them at status quo and also hopefully nudges more customers to the streaming side of their service which sounds like what they prefer.

I could be wrong, I merely have a CS as opposed to an Economics degree, but that's how I see lots of companies here including the one I work for operate.

Andrew Dovichi
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This gives me the impression that they'll actually be reducing their costs while increasing their rates; whatever happened to passing the savings on to the customer?

Michael Nicolayeff
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It gets set aside for passing the profits onto themselves.

Christopher Lowrey
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Personally I don't mind giving them the extra money if they expand their licencing on their streaming service. Not sure if anyone else has used it, but its incredibly convenient but at the same time lacking. As many movies you can get through Mail, but not through the stream.

If they use the extra money they earn to expand that service then I feel like it will very much be well worth it.

Travis Jones
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This is disappointing. I removed the Blu-ray option when they started charging extra for that, and now they're hiking rates up across the board.

I would totally switch to the Instant Watch Only option, except that where I'm currently living has terrible internet speeds. Bleh.

Ujn Hunter
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Streaming doesn't offer subtitles/language options does it? I know for sure I can't watch any special features... I rarely stream. I'm a disc guy.

sukru tikves
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They recently started adding subtitles to streaming movies. There is a web site to search for such titles:

(It's very scarce right now).

[User Banned]
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John Gordon
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This move isn't surprising. As a disruptor moves upmarket they continue to seek higher profit margins. Netflix is simply moving upmarket to steal marketshare from cable.

Nicholas Ulring
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I only use their streaming service. It works great. I have had no issues. Picture and speed works like a dream. The only problem I have is that their streaming selection is not nearly as big as their DVD selection. The streaming service is missing the big AAA movies. I would be willing to pay $20 a month for their streaming service to have everything.

Fiore Iantosca
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I canceled their service yesterday. All the streaming movies I wanted were never available. I'll stick with Red Box so as to not off a monthly payment that I was barely taking advantage of.

Curtis Cooper
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I'm very disappointed by this and have gone down from 3/discs to 2/discs at a time. I do it b/c nothing compares in quality to Blu Rays. A streaming service can never compete with that. If they jack the price higher, though, I'll probably quit altogether.