Founded in 1997, Netflix  (NFLX) is the leading video streaming service in the world, with 118 million subscribers in 2018 (Amazon (AMZN) is in second place, followed by Hulu.)

The story goes that the idea behind Netflix partially started with a Blockbuster late fee. Company founder Reed Hastings, angered by a $40 late fee from the long-gone video rental provider back in the mid-1990s (the movie in question was Apollo 13), started thinking about a new video sharing model that would eventually manifest itself as Netflix today.

Adding salt to the wound, Blockbuster had an opportunity to purchase Netflix for $50 million, and passed on the deal.

Netflix, widely known for its menu of original shows, television classics, and abundant choice of movies, has taken a while to fully lift off - it received just $2 million in venture funding in its first year - but it's certainly flying high right now.

Its business model, with charges a monthly fee for various streaming services, is a mix of old and new dynamics, so it's a good idea to hit the pause button and find out what, exactly, Netflix is charging its customers for video streaming options across multiple delivery platforms.

More importantly, it's a good idea to see what Netflix customers are getting for their hard-earned money.

How Much Does Netflix Streaming Cost?

Netflix offers multiple pricing structures for its video streaming services. Let's examine the basic services first:

Netflix provides its consumers with three primary monthly pricing plans, as follows:

  • Basic, $7.99 per month. Netflix's basic plan doesn't provide high definition viewing and its programs can only be watched on one screen at a time.
  • Standard, $10.99 per month (up from $9.99 in 2017). The Netflix standard offers HD videos and allows for two simultaneous viewings.
  • Premium, $13.99 per month (up from $11.99 in 2017). The top tier offering includes the ability to watch four screens at the same time. It's also the only item on the Netflix that offers a 4K viewing option.

While still in "test" model, Netflix is offering a new high-end streaming service option in select cities. The program, called "Ultra", reportedly offers four Ultra HD viewing streams and/or content viewable in HDR format.

Price of Netflix Ultra Service

The Ultra service, which goes for $16.99 per month offers two options for customers:

  • Version No. 1 provides four Ultra HD streams, with the current $13.99 per-month viewing option sliding from four UHD streams to two UHD streams.
  • Version No. 2 provides access to four Ultra HD streams, but with a twist: only Netflix Ultra customers can gain access to the company's high dynamic range content services, which is a superior viewing experience, according to the company.

While the two model options are being tests in a handful of viewing areas, there is no guarantee the company will or will not go forward with the pricing plans anytime soon.

How Netflix Works

When you join Netflix the process of getting up, running and streaming videos is easy.

  1. Sign up for Netflix on the company website, or on the company mobile app.
  2. Once that's done, you'll be given a "no charge", one-month free trial, where you can play around with the site and try different service models.
  3. If, at any point during the trial period, you opt to end your Netflix experience, you can cancel immediately. Once you sign into Netflix go to the upper right hand of the home page and hit the "Your Account & Help" button. Go to "Cancel Membership" and follow the procedure to cancel your account. Even if you cancel your account at any time during the grace period, you can still watch Netflix programming through the end of the 30-day trial period.

When you sign up for Netflix, you'll be asked to choose between the three main video streaming options. When doing so, here's what to expect, according to current Netflix data:

The Netflix Basic Plan ($7.99)

  • No HD
  • No Ultra HD
  • You can only watch one screen at any one time
  • You can watch programming on your laptop, phone and tablet
  • You do get unlimited movies
  • You can cancel anytime
  • You get the first month free, as part of the trial period offer

The Netflix Standard Plan ($10.99)

  • HD Available
  • No Ultra HD
  • You can watch two screens at the same time
  • You can watch programming on your laptop, phone and tablet
  • You get unlimited movies
  • You can cancel anytime
  • You get the first month free, as part of the trial period offer

The Netflix Premium Plan ($13.99)

  • HD Available
  • Ultra HD Available
  • You can watch four screens at the same time.
  • You get unlimited movies
  • You can cancel anytime
  • You get the first month free, as part of the trial period offer.

Netflix's Blu Ray and DVD Plans

Netflix also offers various DVD and Blu Ray video streaming program, as well.

Here's how they break down:

Netflix DVD plans

1. Starter Plan

$4.99 per month

  • One disc out at any one time
  • Two total discs a month
  • First month free
  • No late fees
  • Free shipping and returns

2. Standard Plan

$7.99 per month

  • One disc out at a time
  • Unlimited discs a month
  • First month free
  • No late fees
  • Free shipping and returns

3. Premier Plan

$11.99 per month

  • Two discs out a month
  • Unlimited discs a month
  • No late fees
  • Free shipping and returns
  • First month free

Blu Ray DVD Plans

Netflix also offers a set of Blu Ray DVD streaming options, as well.

1. Starter Plan

$5.99 per month

  • One disc out at a time
  • Two discs a month
  • No late fees
  • Free shipping and returns
  • First month free

2. Standard Plan

$9.99 per month

  • One disc out at a time
  • Unlimited discs a month
  • No late fees
  • Free shipping and returns
  • First month free

3. Premier Plan

$14.99 per month

  • Two discs out at a time
  • Unlimited discs a month
  • No late fees
  • Free shipping and returns
  • First month free

Netflix Streaming Service Features

The primary Netflix streaming "feature" services are a huge part of the Netflix experience.

Let's take a look at the two most intriguing and popular Netflix feature viewing experiences:

Simultaneous Viewing

The Netflix simultaneous viewing option enables families and friends to share their Netflix account, at the three different pricing models listed above.

For example, the basic streaming option allows users to only stream one screen at a time. But when you upgrade to the standard plan, your account is allowed users to watch Netflix programming on two different devices simultaneously.

Move on up to the premium streaming plan, and you can watch Netflix programming on four different devices at the same time.

HD and Ultra HD Viewing

As the old saying goes, once you experience HD video, you can't go back to basic content viewing - and that goes double for Ultra HD viewing.

For an extra $3 or $6 a month - about the cost of two fast-food burgers or a single Starbucks latte - you can upgrade to the Netflix HD and Ultra HD streaming options.

The difference in viewing quality between basic viewing and HD and Ultra HD viewing is significant, on the order of driving a four-cylinder sedan versus driving a turbo-charged Maserati.

Ultra HD is particularly mind-expanding for video aficionados who may own a 4K television or computer with a 4kK monitor. This viewing technology enables viewers to watch shows at a resolution that is four times the quality of HD (at 1080p).

Only select Netflix programming is available on Ultra HD, so check ahead of time to see if your favorite show makes the ultra-high-resolution grade.

Netflix Pricing Going Forward

It's tough to say what Netflix pricing models will look like even a year from now.

The company is known to tinker with its video streaming options and, as the Ultra experiment attests, there could be new pricing platforms coming down the pike anytime.

After all, the company has boosted customer prices twice in the last two years. While that hasn't hurt Netflix - it added 7.4 million customers in the first quarter of 2018 - the video streaming giant continues to invest in new content, including films, documentaries, and Netflix originals.

In a business model where founder Hastings has acknowledged that increased quality and content leads to higher consumer prices, expect Netflix prices to rise sooner rather than later - so enjoy the Netflix experience at the relatively lower prices you're seeing right now.

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