November 22, 2010, 2:33 PM

Netflix adds a streaming-only plan

The rental service says members now watch more streamed content than mailed DVDs.

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Netflix Inc. today announced a new streaming-only subscription plan for $7.99 a month. It also announced it is raising prices for its DVD-by-mail subscription plans. The prices go into effect immediately for new Netflix customers. Price changes take effect for existing customers in January.

The company says Netflix customers will watch more content streamed over the Internet this quarter than they will watch on DVDs delivered by mail, and that it expects that trend to continue. “We are now primarily a streaming video company,” says Netflix co-founder and CEO Reed Hastings.

The streaming-only plan includes unlimited access to Netflix’s library of content available for live streaming. The price is $1 less than the previously available lowest-cost plan that included streaming but also included one DVD rental at a time by mail. The price of that plan has increased to $9.99 a month.

The prices of all the subscription plans that include DVDs by mail and unlimited streaming are going up. The two-DVD plan with unlimited streaming increased $1 to $14.99. For the rest of the plans, the price increase of each DVD-by-mail and streaming plan corresponds to the number of DVDs in the plan. The three-at-a-time plan increased $3 to $19.99. The eight-at-a-time plan went up $8 per month to $55.99.

The company has been aggressively developing its library of content available for streaming over the Internet. It signed licensing deals with several film and television studios this year to add content . Netflix also launched in Canada in September but Canadian customers only have access to streamed content .

“Creating the best user experience that we can around watching instantly is how we’re spending the vast majority of our time and resources,” writes Jessie Becker, vice president of marketing, in announcing the changes to customers on the Netflix blog. Netflix is No. 14 in the Internet Retailer Top 500 Guide.

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