» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 129 | NO. 1 | Wednesday, January 01, 2014

Netflix Tests New Price Tiers for Video Service

AP

Print | Front Page | Email this story | Comments ()

Netflix is testing new price plans for streaming video as it tries to lure more viewers.

Among the plans being tested are a $6.99-a-month plan that allows only one video stream to be watched at once, and a $9.99-a-month plan that allows three streams at one time, whether on a TV, tablet or computer.

A Netflix spokesman says not everyone will see the test prices and they may never roll out to all customers.

Netflix's standard $7.99-a-month plan allows users to watch video on up to 2 screens at once, including TVs and mobile devices. An $11.99-a-month service allows up to four shows at once. Netflix announced that plan in April.

Any move to offer a cheaper service tier would be surprising to some analysts, who expect the company to raise prices eventually to pay for the service's content.

The lower-priced tier could attract more value-conscious consumers, Sterne Agee analyst Arvind Bhatia wrote in a note to investors. But it also could prompt existing customers to trade down, if they cancel and sign back up for the cheaper service.

At the same time, though, Netflix has had to deal with increased competition for its customers. Amazon's Prime shipping service comes with a video-on-demand service similar to Netflix's. Redbox, which mostly rents DVDs through kiosks, has also rolled out a streaming video service.

Netflix subscribers have shown they can be fickle about price changes. The company's stock plummeted by more than 80 percent from highs reached in 2011 after the company imposed pricing changes that triggered a customer backlash.

Netflix's stock has since made up all those declines and set a new all-time high just above $389 in October. On Tuesday, its shares fell 21 cents to $366.78 in morning trading.

Introducing original content, such as the shows "House of Cards" and "Orange is the New Black," helped Netflix gain new customers this year. Netflix added 1.3 million U.S. subscribers in the third quarter and ended September with 31.1 million.

The Los Gatos, Calif.-based company also still offers a DVD-by-mail subscription plan starting at $7.99 a month, though it is moving away from that business in favor of delivering video over the Internet.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 38 349 15,066
MORTGAGES 111 449 19,779
FORECLOSURE NOTICES 0 58 3,853
BUILDING PERMITS 0 512 35,842
BANKRUPTCIES 62 309 14,343
BUSINESS LICENSES 18 138 5,129
UTILITY CONNECTIONS 69 385 21,817
MARRIAGE LICENSES 13 106 4,663

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.