Tuesday, December 31, 2013

Netflix Tinkers With Its Subscription Plans

Posted By on Tue, Dec 31, 2013 at 10:40 AM

Netfllix, which saw record usage and critical acclaim in 2013, is trying something new for 2014: subscription fees based on the number of users per account.

According to an offer posted on its website, Netflix is offering some new customers plans that provide access on as many as four screens, letting household members watch different shows at the same time. The monthly prices range from $6.99 to $11.99.

In essence, Netflix is looking for ways to curb account-sharing, which chisels away at Netflix's revenue stream from is approximate 40 million subscribers.

Currently, standard Netflix streaming costs $7.99 per month.

But Netflix runs the risk of a number of its customers downgrading to one-screen for $6.99 a month.

“If consumers who would have taken the $7.99 plan now sign up at $6.99, that all comes out of their profit margin," media business analyst Richard Greenfield told Bloomberg Businessweek. "This is not the next pricing move investors were expecting.”

Netflix was the top-performing stock in the Standard & Poor's 500 Index for 2013, nearly quadrupling its value while seeing record subscriber growth.

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