Netflix may believe the DVD rental business is dying, but the company is making some moves to appease customers who prefer to get their content on disc. Netflix is re-emphasizing its DVD-only subscription options starting at $7.99 per month. To sweeten the deal, the company is offering a one-month trial offer: if customers don’t like the service, they can cancel in the firth month without any charges.
The $7.99 per month plan enables customers to rent one DVD at a time by mail; for $11.99 a month, customers can rent two DVDs at a time. Customers who want to receive Blu-ray discs can add the capability to their account for an additional $2 a month.
Netflix had never cancelled the DVD-only subscription plans, but had steadily been steering customers towards streaming service. Earlier this year, Netflix offered one-at-a-time DVD rentals as a $2 add-on to a $7.99 per month unlimited streaming plan, then angered customers by splitting streaming and DVD plans into separate programs priced at $7.99 each. Netflix then announced plans to spin off its DVD rental business entirely as Qwikster—the company quickly backpedaled, but not before the damage was done: Netflix lost roughly a million customers and its stock took a beating.
The re-emergence of DVD-only plans represents another minor flip-flop in Netflix’s push to take its service—and its customer base—to a purely Internet model. Despite the strong success of Netflix’s streaming offerings—Netflix has been estimated to account for as much as a third of U.S. Internet traffic during peak hours—many customers prefer the company’s DVD offerings. Streaming may be more convenient, but the amount of content available pales in comparison to what’s available from Netflix on DVD. That ratio is going to shift in an unfavorable direction again later this month, when Netflix’s license with Starz expires: that means much of the content Netflix offers from Sony and Disney will disappear from the streaming service. Netflix is also facing new handicaps on its ability to offer new releases for either rental or streaming, agreeing to a 56-day delay on offering Warner Bros. titles.
Netflix is hoping to increase the appeal of its streaming service by offering original content. It’s first series, Lilyhammer, has just debuted, and the company is prepping House of Cards with Kevin Spacey as well as a new season of Arrested Development. The company is planning additional original titles for 2013.
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