Yep, you knew it was going to happen.  Intent on making the move away from their original business model and the cost of storing and mailing discs, Netflix has separated the disc mailing business from the online streaming biz.  I got this email:

Dear Chris,

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $14.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 2 out at-a-time (no streaming) for $11.99 a month

Your price for getting both of these plans will be $19.98 a month ($7.99 + $11.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

–The Netflix Team

I think they are making a big mistake in separating the two. Okay, maybe not in separating, but at least in raising the cost to people who want to continue to do both. Netflix – wake up! Eventually, people will move away from the disc, but if you force them to choose to do it on your terms, you risk alienating them.

What happened to customer loyalty? What happened to being loyal to those who have been loyal to you? What is wrong with your original customers costing you a little more than the new ones? What’s wrong with going the extra mile for those people who are the reason you succeeded in the first place?

I have no doubt that a large number of people like myself (2 out at a time plus unlimited streaming) will just drop it all together because there are cheaper streaming content sites out there and it was barely worth the money for the actual disc rentals before this price increase.