The future for Netflix is online streaming, not physical DVDs and Blu-rays, and so the company is understandably doing everything it can to attract new subscribers, including the introduction of a new entry-level service tier. Industry watchers noticed this week that Netflix has begun to offer a cheaper single screen plan for $6.99, a dollar less than its formerly cheapest option. The caveat? It’s only available to new subscribers to the service, at least for now.
Netflix launched as a DVD-by-mail service in 1999 and first added online video streaming in early 2007, but customers were required to have a disc-based plan in order to access the feature. By 2010, its streaming catalog was robust enough, and the service popular enough, to justify the introduction of a streaming-only plan, a major shift from the company’s core business strategy. The shift paid off, however, and Netflix is now one of the largest users of Internet bandwidth with over 40 million streaming subscribers as of Q3 2013.
Originally priced at $7.99, the Netflix streaming-only plan offered consumers streaming on up to six devices, with a lightly-enforced limit of two simultaneous streams. This, however, led to account sharing between family members and friends. Although against the spirit of the service’s terms, multiple people all around the world could share a single Netflix account as long as no more than two were watching at the same time.
In an effort to stop this behavior and ensure subscriber growth, Netflix altered its terms of service in April 2013 and introduced two new streaming options: a $7.99 tier that was explicitly limited to two streams and a new $11.99 plan that offered up to four simultaneous streams.
Now, Netflix is testing another option, a $6.99 single-stream plan. Available only to new subscribers, the plan can give those with tight budgets a new means to stick with the service beyond the free two-week trial period. Of note, although other sites are reporting that the new tier offers streaming in standard definition only, our own testing revealed no such restrictions, as seen in the screenshot above. A conversation with a Netflix customer service representative revealed that the offer was still in flux, and that things may change as it’s implemented. As for our test account, our $6.99 service plan did in fact offer HD streaming, so you may wish to double check if you’ve already signed up.
As mentioned earlier, the new plan covers new subscribers only at this point, although customers speaking with Adweek report that Netflix reps told them plan will be “definitely” offered on a wider basis in the future.
While most Netflix users enjoy the ability to have simultaneous streams, those with only a single television or device, or those with slower Internet bandwidth (if the standard definition restriction proves true in the long run) may be able to save a few bucks a year with the new plan.
