Dropping Netflix? Here Are Your Options

NEW YORK ( MainStreet) -- Netflix announced a major price hike Tuesday, raising the monthly rate for online streaming and one DVD at a time by mail from $9.99 to a combined $16. The rate change goes into effect immediately for new customers, and existing customers will see their rates change in September.

The reaction from Netflix ( NFLX) subscribers to this 60% price hike was immediate and predictable. "Dear Netflix" became a trending topic on Twitter, and many of the tweets read more like "Dear John" letters. Meanwhile, a poll conducted among TheStreet readers found only 10% were willing to pay for both DVDs by mail and unlimited streaming. While the price hike will allow the company to realize better margins, it's also going to lose some customers to one of the many competing services.
The reaction by Netflix subscribers to a 60% price hike was immediate and predictable -- and negative. Fortunately, there are alternatives for those who opt to drop Netflix.

If you're one of the customers thinking of jumping ship, here are a few of your options.

While Netflix streams movies or mails DVDs to you, Redbox ( CSTR) actually requires you to get in your car and pick up the DVD from one of the company's red vending machines. The selection isn't as good with Redbox, especially if there aren't many locations nearby (each box holds only 700 DVDs, while Netflix has a library of more than 100,000 titles). But Redbox charges only $1 per day for a DVD rental, so if you only rent a couple of movies a month and get them back in a timely manner, it's the better bet. If on the other hand you like to rent several movies a month and don't always get them back in a timely manner, you're better off choosing one of Netflix's plans.

Hulu Plus
If you mainly used Netflix to rent TV shows, you might consider switching to Hulu's premium service. In addition to new episodes of current TV shows, Hulu Plus also has a massive back catalog of old TV shows. It costs $7.99 a month, the same price you'll pay for unlimited Netflix streaming without DVDs by mail. If you still like to get a lot of movies you should probably stick with Netflix, but if you want to be able to watch old episodes of Airwolf whenever you want, consider making the jump to Hulu. Like Netflix, it can stream to your TV via devices such as Roku and video game consoles such as the Xbox 360. It does not have a DVD-by-mail option.

Amazon Prime

Amazon ( AMZN) has long offered the option to get free two-day shipping on thousands of items when you pay $79 a year ($6.58 a month) for its Amazon Prime service. It was a good deal if you ordered a ton of stuff from Amazon, but it got a lot better when Amazon introduced unlimited streaming of movies and TV shows for Prime members without adding anything to the annual fee. Unlike Hulu Plus, the videos are all commercial free, though the list of devices that allow for streaming to your TV is limited to Roku and Internet-enabled TV sets. There's also a more limited selection than Netflix: While Amazon's instant video has a library of 90,000 titles, only 5,000 of them are free for subscribers to the unlimited plan.

Yes, the company Netflix nearly killed has had to adapt to survive, and a quick look at its website shows the company's new emphasis on DVDs by mail and streaming. If you want to get DVDs by mail, there's an $11.99 a month plan that allows you to have one DVD out at a time, $4 more than the comparable Netflix plan. If you want to have two DVDs out at a time it will cost you $16.99 a month (versus $11.99 for the same plan from Netflix). The company justifies this extra cost by touting the fact that it gets new releases 28 days before Netflix or Redbox, so if you like to get DVD releases the day they come out, we suppose this is the better option. The company also offers an OnDemand service that works through your computer, mobile device, Internet-enabled TV or compatible DVR box. Rather than a monthly fee, you'll pay around $3.99 to rent each new release, so unless you're only renting one DVD a month, the Netflix streaming plan is the better option.

>To submit a news tip, email: tips@thestreet.com.


Follow TheStreet.com on Twitter and become a fan on Facebook.

If you liked this article you might like

7 Essential Rules for Investing in Tech Stocks

Politics Hang Heavy Over FCC's Review of Sinclair-Tribune Media

Microsoft's New Xbox One X Shows It's Done Trying to Please Everyone

Cord Cutters Aren't Just Leaving Pay-TV Because of Price

Netflix Shares Could Rise 16% on Big Boost in Subscribers