As promised, Netflix has raised its streaming subscription fees for new users to $8.99, from the $7.99 price it set three years ago. The price hike was promised in the company's most recent shareholder letter, where it stated that past subscription plan changes taught the company a lesson about changing too much too quickly.

The very Earth shook, seas dried up, and our crops were overcome with locusts when Netflix broke its streaming and DVD subscription plans out from a $9.99 bundle deal into two disparate $7.99 plans. Not only that, but the company planned to rebrand its DVD service as "Qwikster" in order to let the two operations function independently.

The outcry was swift and virulent. Netflix recanted on the rebrand, though the prices stuck. This time around, Netflix is being more cautious. The company hinted heavily in its shareholder letter that the price increases were coming as a result of the paid peering arrangements the company has struck with providers like Comcast and Verizon, which were damping the site's traffic on the accusation that it uses too much of their resources.

The price increase applies only to new subscribers. Existing subscribers will be grandfathered in at their old $7.99 rate for two years, at which point they will be bumped to $8.99. The increases elsewhere are £1 in the UK (to £6.99) and €1 in Europe (to €8.99). Netflix has also been testing a standard-definition-only plan that would cater to users who watch primarily on old TVs and monitors or mobile devices, or who operate under bandwidth caps from ISPs and must be careful about data usage.