Netflix Tests Lower-Priced, Standard-Def SubscriptionBy: Sean Patterson - December 31, 2013
Netflix is everywhere. The company’s streaming video app can be found on set-top boxes, smartphones, tablets, video game consoles, smart TVs, and other devices. This ubiquity has allowed Netflix to grow beyond its DVD-by-mail roots and become the largest player in the quickly-growing video streaming market.
Along with this popularity, though, comes a problem: how to prevent subscribers from sharing streaming accounts across with others. Netflix’s millions of subscribers are a great continuing source of revenue for the company, but grabbing those few potential subscribers who share an account with a friend or family member is quickly becoming one of the only ways Netflix can expand in near-saturated markets such as the U.S.
Netflix’s solution to the problem so far has been to embrace subscriber habits to some extent, but limit the number of screens that subscribers can watch Netflix on simultaneously. The company’s basic streaming video package now allows subscribers to watch video through Netflix on two screens at once, while a higher-price family-style package allow up to four screens at once.
This week Netflix has introduced a third tier intended for those who never share their streaming account with anyone. The new tier would allow new subscribers to watch Netflix on only one screen at a time. However, the new tier does not offer any Netflix video in high definition, making it suitable only for those who still do not own an HD TV or those who don’t mind the lower-quality video. The package is priced at $6.99 – one dollar less than the standard two-screen streaming package.
According to an Adweek report, the new tier is, at this point, only a test. Netflix has stated that not every new subscriber will be offered the new package, though it could certainly roll out to more people in the future.