As long as DVD’s are still a viable resource for studios (who create all the content Netflix delivers), they can dictate terms for what is/isn’t available to stream. While I don’t agree with the price increase, it’s clearly not so much a $ decision by Netflix as a way to force the content providers’ hands.
The majority of Netflix’s subscribers are streaming only already, and the only way they can get more and better variety in their streams is to have that be their primary way of delivery. DVD’s are dying, sales are flatlining, Blu-Ray is not saving the home video market–streaming is where the future of all content is going, and if this helps it, great.
And really, with Redbox renting movies in the same availability window as Netflix, most people who want DVD’s can get them (in the same amount that they actually watch, not just what is sitting in their queue because they forgot to return the one that they already have out) for less than what they would pay for Netlfix’s DVD’s.
And the “new release” issue is NOT Netflix’s decision–that was (again) the film studios. They don’t allow rental companies to rent films that are new because they don’t make money on rentals–they make money on sales. And if they force people to wait at least a month to get a new release, they will sell more copies.
If you truly want more streaming of newer movies, sadly, this decision makes sense. The more people who are streaming, the more Netflix (and companies like them) can say, “This is where consumer demand is,” and start to get concessions from the studios.