Netflix said November 21 that it will offer a streaming-only subscription plan for $7.99 a month to US members.
The company will continue to offer members the option of receiving DVDs by mail, though it will increase the price of that plan by $1 a month to $9.99. New subscribers can use the steaming-only service immediately, while current members can access it on January 1, 2011.
“It’s taken off really well in Canada, so we are offering it in the US now as well,” said Steve Swasey, VP of corporate communications at Netflix, adding that the Canadian streaming-only service has beaten the company’s expectations.
Netflix will promote the offer on social media sties and e-mails to subscribers. Swasey did not specify if the company will use additional promotions through direct mail, TV or radio.
The company has rapidly expanded its streaming offers in the past year, completing licensing deals with NBC Universal, Warner Bros., 20th Century Fox, Epix, Relativity Media and Nu Image/Millennium Films to add first-run theatrical films, television series and movie classics.
The streaming-only service in the US indicates the company will move further away from its predominant mail order system. The move could take additional mail volume away from the financially struggling US Postal Service.
“Netflix is really one of the mail-order geniuses of our time,” said John Schulte, president and chairman of the National Mail Order Association, an industry group. “Now this move to streaming is not going to help the Postal Service. But in the back of my mind, I suspect that it has always been Netflix’s long-range plan to shift to online delivery.”
However, Schulte said he does not see the decision as a blow to direct mail as a marketing channel.
“Direct mail is still the premier tool for small and mid-sized businesses,” said Schulte. “For those who want to deliver their message in a way that has less chance of being missed, the mailbox has just gotten less cluttered.”
