Many of us here on MyBloggers subscribe to Netflix, and by now everyone should have received notice of the price increase.

Before: $9.98 a month for unlimited DVDs (1 at a time) and unlimited online streaming.

New: $7.98 a month for unlimited DVDs (1 at a time)
$7.98 a month for unlimited online streaming

Netflix claims that the old plan was unfair to customers who just wanted DVDs without the streaming.

But the main reason for this 'adjustment' is that Netflix is tired of paying all that money for mailing the DVDs to us. Their initial business plan was to provide all their product online (that's why it's called Netflix), but technology in our homes wasn't advanced enough at that time to make this possible and they mailed out the DVDs for several years.

Now we can use our Wii or our Play Station or other devices to bring the movies to our home TV by way of our router, so in some respects it's as good as the DVDs. And we don't have to wait for the mailed DVD to reach us.

Mailed DVDs:
Pros:

• 
  Lots to choose from. With the exception of a few really old movies that were probably bombs, I could find just about any movie I wanted to see on Netflix


• 
  Subtitles are available on a lot of them; especially nice for when we can't understand thick British accents


• Extra features. From Deleted Scenes to Director/Actor commentaries to documentaries about the true stories behind the movie, the extras sometimes are the best part of the DVD


• Fast turnaround service. Netflix processed the returns really fast and if they didn't have your next requested DVD locally sometimes they would send an extra one while you waited for it to come from Iowa or somewhere.

Cons:

• Delay on new movies. This isn't an issue for me, but over the last year or so other customers have been complaining about delays between the release of the newest movies and when they are available on Netflix. This delay was increased per an agreement with the movie studios in order to encourage people to go to the movies.


• 
  Damaged disks. Even though Netflix says to try washing the DVD, occasionally you get one that has a deep gouge and parts of the movie are unwatchable.

Video Streaming
Pros:

• Instantly available. Having a slow afternoon? Waiting for the mailman to bring your next Netflix DVD? Watch a movie on your TV or computer.


• TV series. Catch up on all those old television episodes that you missed, commercial-free.


Cons:


• Fewer subtitles, no extras. A very small percent of the online movies have subtitles available, and I've never seen a way to view the Extra Features.


• Slow download on cheapest DSL line. You'll be watching the movie and it will pause for a few seconds up to minutes in order to re-download the video stream. Our monthly Internet access bill would be about $10 higher if we wanted to fix this problem, so it becomes a money issue for those of us who are trying to keep our cable and phone bills reasonable.


• Poor selection. Yes, there are thousands of movies and old TV shows available, but sometimes you look and look for something that won't be a total waste of time to watch. Titles on our Instant Queue will drop off en masse because of contract changes between Netflix and content suppliers. For example, all the Sony movies were pulled last month because of a change in the Netflix contract with Starz, it's pay TV distributor.


• Future price increases inevitable. We can look forward to future price increases because the content suppliers are increasing their rates. "Netflix's contract to receive content from Starz ends next year, and analysts say Netflix will likely pay a significant amount to renew it. Netflix CEO Reed Hastings said it "wouldn't be shocking" if Netflix paid more than $200 million per year for Starz' service, far more than the estimated $30 million a year it is paying currently.
  
  Netflix also wants to bring in more money because, as the company has grown, it is making less per subscriber. It got a monthly average of $11.97 per subscriber in the first quarter of this year. At the end of 2006, before Internet streaming was launched, the average amount paid per subscriber was $15.87 per month." Industry analysts say they are going to push us more and more to online streaming and eventually phase out the DVDs altogether.


Maybe at some point I'll get over this increase and pony up the bigger fees, but there are significant differences between the two delivery methods, making them apples and oranges for me.

There are other options - here's a good article describing them:

Netflix hike may prompt search for more options

My ultimate solution is going to be to read more books and download audio books to my iPod free from the library.