Netflix testing $7.99 and $8.99 streaming-only plans in US right now, one is not a discount (update)
When CEO Reed Hastings called Netflix “primarily a streaming company that also offers DVD-by-mail,” he wasn't messing around, as the company's quietly made streaming-only plans a reality on US shores.
Context & Ripple Effects
A month after NewTeeVee reported that a cheaper streaming-only plan was under consideration — then only an unconfirmed hint from Reed Hastings — Netflix has quietly put two such tiers into live testing on its own US signup page. The move lands weeks after the streaming-only speculation first surfaced and follows the company's September Canadian launch, where it debuted as a pure streaming service with no DVD arm at all.
The framing matters more than the prices. Hastings has already redefined the business as 'primarily a streaming company that also offers DVD-by-mail,' and the iPhone app's October video-out support shows Netflix pushing toward the TV screen from a second direction. A streaming-only tier at $7.99–$8.99 is the pricing expression of that identity shift.
First-order effects
- US subscribers weighing a plan change can now pick a streaming-only option for less than the combined DVD-plus-streaming bundle, directly undercutting the package most existing customers hold.
- The $8.99 tier being positioned as something other than a discount signals Netflix is segmenting by format rather than simply cutting price — one plan is a downgrade path, not a sale.
Second-order effects
- Every customer who migrates off the bundle erodes the DVD-by-mail revenue line that still funds the catalog, forcing Netflix to manage deliberate cannibalization of its own highest-margin business.
- Rivals in streaming and physical rental now face a sub-$9 reference price for unlimited streaming, compressing what they can charge for comparable access.
Third-order effects
- If the test converts, the DVD-by-mail service shifts from core product to legacy add-on, and Netflix's pricing architecture reorganizes around streaming tiers with discs priced separately or phased out.
- The episode becomes a template for subscription companies unwinding bundles: introduce the standalone product quietly at a test price, watch migration, then formalize the split once the cannibalization rate is known.
The trend: Subscription media businesses are deliberately cannibalizing their own bundles, using quiet price tests to migrate customers from hybrid physical-digital plans to streaming-only tiers.