Netflix Tests Cheaper Monthly Plan

/ Jan 2, 2014


Netflix is testing out a cheaper payment option, which offers standard definition streaming, available to only one device, for $6.99 per month. That’s $1 less than Netflix’s most popular pricing plan, which offers HD streaming to up to two devices for $7.99 per month.

As first reported by Adweek*, the new SD option is only meant for new subscribers (current customers can’t downgrade), and appears to be a way for Netflix to increase its subscriber count in the US. The service surpassed HBO domestically last year and, based on its Q3 financial numbers, has more than 31 million customers in the US. A cheaper option, even one that’s just a dollar less, might convince some users to sign up for the service — especially those who just want to watch their favorite shows on their computer with no desire for extra benefits like streaming to connected TVs.

Netflix is probably wary about changing its pricing options. While the price hike around the Qwikster debacle feels like a distant memory, I’m sure it’s not been forgotten at the company.

But as the Adweek report notes, content costs are rising. And Netflix is very much interested in locking down exclusive rights to stream movies and TV shows. That’s going to cost more than standard licensing deals. So the service will continue to  experiment with ways to earn additional revenue.

Last year, Netflix rolled out a family-centric plan, which offers streaming for up to four devices at the same time for $11.99. It’s also testing a $9.99 monthly plan that supports up to three devices.

* Yeah, the news came out earlier this week, but it was the holidays! What do you want from me?

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