Netflix announces backstabbing plans to gouge its customers

Netflix headquarters.

Congratulations, Netflix users: The crimson-envelope video company is cutting prices all over the place! (As long as you don’t have the bad fortune to subscribe to its most popular plan!)

As the company touts:

First, we are launching new DVD only plans. These plans offer our lowest prices ever for unlimited DVDs – only $7.99 a month for our 1 DVD out at-a-time plan and $11.99 a month for our 2 DVDs out at-a-time plan. By offering our lowest prices ever, we hope to provide great value to our current and future DVDs by mail members. New members can sign up for these plans by going to DVD.netflix.com.

Oh, well that sounds lovely! Wait, but what’s wrong? As the Wall Street Journal reports:

The Los Gatos, Calif., company said it will no longer offer a $9.99 a month plan that allows members to stream an unlimited number of movies over the Internet and to rent one DVD at a time. In its place, Netflix subscribers will have to pay $15.98 a month for a plan that combines an existing $7.99-a-month streaming-only movie service with a new $7.99-a-month DVD-only rental plan that lets them check out one disc at a time.

So a service that used to be $10 will now be $16? We’re not great at math, but we’re pretty sure that’s a 60% price hike being passed off as some sort of discount.

This has to be some sort of plan to fob off the actual DVD plans and push people into the streaming subscriptions, right? Otherwise, a 60% price increase would mean that Netflxi had to be losing tons of money on the original one-DVD-plus-streaming plan. How much of a loss-leader was it?



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