CHICAGO -- Netflix Inc. took another step in its evolution Monday, rolling out a streaming- only subscription option in the U.S.
The news sent Netflix shares up, as the plan gives the company a higher-margin service that excludes the costs of shipping discs.
For $7.99 a month, subscribers can watch more than 20,000 titles streamed from Netflix to their TVs and computers, without renting any DVDs. The option is available to new and existing members as of Monday.
Netflix also announced a series of price increases to its monthly fees. To receive unlimited movies and shows and have one DVD out at a time, the fee rises to $9.99 from $8.99. Unlimited streaming and three DVDs moves to $19.99 from $16.99; with six DVDs, to $41.99 from $35.99; and with the maximum of eight DVDs, to $55.99 from $47.99.
"We are now primarily a streaming-video company delivering a wide selection of TV shows and films over the Internet," said Reed Hastings, Netflix co-founder and chief executive officer, in a statement.
When it released quarterly earnings last month, Netflix said that in the fourth quarter, a majority of its subscribers will watch more content via streaming than movies and TV episodes delivered through the mail on DVD.