Netflix is Increasing Its Monthly Subscription: Here’s a History of Its Price Hikes

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Netflix is Increasing Its Monthly Subscription: Here’s a History of Its Price Hikes

Oh Netflix, what would we do without you? It’s a little odd to think about, but Netflix has actually been around since 1998, when it first started as a DVD-by-mail service. Remember thinking what a genius idea that was?

It’s hard to think about life before Netflix streaming and a world where we actually went out and saw movies or, you know, left the house. But, depending on how much money you don’t mind spending on your Netflix addiction, a break up might be around the corner. That’s right, it’s time to come to terms with what’s happening next month: Netflix is raising its monthly subscription prices for some customers.

Sound familiar? Let’s take a look at how Netflix’s prices have changed over the years:

2007: The Dark Days Before Unlimited Streaming

It wasn’t until April 2007 that Netflix began offering streaming services. When they did offer streaming, it was actually a free add-on for the company’s traditional rental-DVD subscribers. Yeah, back in the day, streaming was added at no additional charge! There was a stipulation though: you were only given one hour of streaming per dollar spent on your monthly subscription. So, if you were paying for their $16.99 DVD monthly plan, that meant you got about 17 hours of streaming per month. If you’re thinking “wow I could stream that in one day,” you’re right, and keep that thought in mind!

2008: Streaming and DVDs for $4.99

In January 2008, Netflix lifted the restriction and offered unlimited streaming to all rental-disc subscriptions. If you were on the cheaper monthly plan for $4.99, which allowed for two DVD rentals per month, you were only allowed two hours of streaming per month. But keep in mind that this is also around the time Hulu and Apple offered video rental services. Also in 2008, Netflix started offering Blu-ray DVD rentals for an additional fee.

2011: The Splitting of DVDs and Streaming

Finally, in 2011, Netflix made a big decision and split its subscription services into two different packages: one for streaming, and one for DVD rentals. The price for DVD rentals stayed the same at $7.99, and Netflix offered a new, unlimited monthly streaming package for $7.99. Netflix DVD rental plans ranged from $7.99 to $19.99 a month, which included a one-month free trial and unlimited exchanges.

People were upset with this decision because if you wanted to stream and have DVDs mailed to you, you had to pay for both plans. In fact, the company lost hundreds and thousands of more subscribers than it thought it would and its stock price plummeted after the announcement. To put it simply, 2011 was a pretty bad PR year for Netflix.

2014: The Price Hike Finally Came… For Some

Next month Netflix will raise its monthly price, but only to a specific group of customers. If this price hike feels familiar to you, you’re probably having flashbacks to May 2014, when Netflix announced that it would be raising its streaming plan for new customers from $7.99 to $9.99. So, anyone who became a Netflix customer in May 2014 and is currently paying $9.99 will not see a price increase next month.

2016: Goodbye to Grandfathered Customers

The price increase affects those customers who had been paying the $7.99 monthly price when the 2014 price hike announcement was made. In case you’re confused and don’t remember this, Netflix grandfathered in any customer who had been using the service and paying $7.99. But, these are the customers—roughly 37% of Netflix’s U.S. subscribers, who will be forced to pay $9.99 starting next month.

With all that said, Netflix has been fairly shy about raising prices over the years. Aside from the original 2014 raise and the subsequent raise on grandfathered customers, Netflix has overall kept prices down and users happy. However, with the amount of new original content Netflix is putting out, there’s no questions that Netflix will do a general price hike soon. Now that we’re all paying $9.99, I could see Netflix pushing up to $12.99 soon, or perhaps even a multi-tier model with exclusive access to original content on the day of release.

Research indicates that while 41 percent of customers claim they are going to cancel their subscription, only 4% actually will. Though it sucks to have to pay more for something you’re used to paying less for, I bet if you thought about how much time you actually spend watching Netflix, it still doesn’t seem like such a bad deal.

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