I don’t usually blog about stuff that are unrelated to HD trailers or about my site here, but I was really annoyed when I found out today that Netflix was changing their pricing structure. It’s not the fact that Netflix is increasing their prices that annoyed me, but how they’re doing it, especially to existing customers.

For those who have not seen the new pricing or read their press release, here it is: Netflix Introduces New Plans and Announces Price Changes

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.

The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.

The highly rated user comments are definitely things I agree with.

Basically what’s happening is that they’re splitting the DVD rentals subscription and the streaming subscription into 2 separate plans and if you want both, you have to pay for both plans.

Now that I’ve had some time to cool down and analyze why I’m so irritated by this news, I’ve come to the following conclusion:

I’m not against a price increase. I understand businesses need more revenue to expand and to provide a better service. I fully understand why I need to pay $2 more per month for blu-ray access. When they raised their prices last year to provide streaming, I was totally fine with that.

What I am against is the drastic price increase to maintain a similar level of service. People currently on the 1 dvd plan will be paying 60% more per month (from $10 to $16). I currently also get access to blu-ray to take advantage of my HDTV so my subscription will increase from $12 to $18. Netflix has generally been great about treating existing customers well, but this price change stinks.

For those who are already streaming, the price hike won’t affect you. For those who don’t care about streaming, it’s even gotten cheaper for you. But if Netflix’s goal is to convert DVD renters into online streamers, this is the wrong move.

There are no savings to get both the DVD plan and the streaming plan, giving customers fewer reasons to get both subscriptions.

The online selection may be large, but most of it is crap. By the time you can actually stream a video, it’s usually at least a year since it was released theatrically. It’s great for watching movies you want to rewatch, but for most new releases, I still rely on DVD/Blu-ray to get my fix. Even though I currently have unlimited streaming, I definitely spend more time watching the DVDs/Blu-rays than from Netflix streaming.

Here is a list of things Netflix could do:

1. Provide a bundle discount when you get both subscriptions. I’m not even asking to be grandfathered in at a particular price. I’m just asking for a discount when I subscribe to multiple services from the same company.
2. Provide DVD only subscriptions with a small # of streaming hours, so people can try out their video streaming service. When the selection gets good enough, people will eventually switch over.
3. Provide a limited streaming option (e.g. 20 hours per month or 10 movies per month) for a lower subscription fee. I stream less than 10 hours/month via Netflix and wouldn’t mind paying $2-3 more for it.

As the way things stand today, I’ll most likely cancel my streaming account once September 1st hits as I just don’t use it enough.