Netflix Raises Prices and Launches Streaming Service

By Lucy Mitchell
Nov 22 2010

This morning Netflix announced the launch of their streaming video service for the US while also announcing that the DVD by mail service price would increase.

The launch of the streaming only service has been anticipated for months. The service was previously launched in Canada and other countries before hitting the US. The company said that more people are watching movies and television that are streamed over the internet.

The price increase for the DVD by mail service is also not surprising to many in the industry. With consumers looking for faster ways to watch the movies and television shows that they love, DVD by mail services are largely losing their luster.

Furthermore, users can have just one DVD at a time and then must wait to get the next.

Many have said that Netflix will most likely drop the DVD by mail service altogether at one point. The business model is still solid but the streaming service is far cheaper to keep running.

The company will have to buy only one copy of the film that they wish to stream, rather than hundreds with the DVD by mail service.

At this time Netflix is offering combined streaming and DVD services for customers as well as streaming only services. This combination has increased revenues several times over.

The increase in price is just $1 per month for the combined DVD and streaming service, which should provide an additional $20 million in revenue for Netflix.