Thursday is Sept. 1, a day long dreaded by movie aficionados. Netflix is officially hiking up its prices, so that people who have gotten used to the convenience of unlimited streaming and dvd rentals for $9.99 a month will now have to pay $15.99, and they’ll only get one DVD at a time.

Those willing to forgo video streaming can get a single DVD for $7.99, but will have to pay $11.99 for two.

Is the price hike legitimate? Perhaps. With new competitors, studios have been able to demand higher prices of Netflix and its competitors for the right to rent their movies. And then there is the question of bandwidth. Streaming videos already accounts for 22 percent of Internet traffic in the U.S. and Canada, and providers will eventually have to pay more for this. While the price of Netflix will go up, so will the prices of its competitors.

When Netflix first announced the price hike, regular users took to the internet to voice their complaints. Almost half of them even threatened to cancel their Netflix subscriptions in response. But most of them won’t. The fact is that it is a lot easier to complain on Facebook than to actually find a viable alternative to a popular service. Netflix recognizes that some users will cancel their subscriptions, but they number fewer than the people who have threatened to do that.

Analysts believe that the price hike will actually benefit Netflix, with the bulk of cancelations coming from people in lower-priced plans. “Gross margins should benefit,” says Goldmann Sachs analyst Ingrid Chung, “as we believe that the majority of lower-priced (subscribers) were less profitable for Netflix.”

This is evidenced by the stock prices. While these have declined sharply since July 13, the day after Netflix’s announcement, they have begun to climb again in the last week. After peaking at $298.73 they bottomed at $203.35, but within the last week alone, they climbed back up to $232.40 per share. As a long-term investment, it is also worth remembering that the current share prices are almost double what they were in August 2010, when they were selling for $121.81.

Read More at the Christian Science Monitor
Read More at Reuters
Read More at Businessweek