Netflix Tries Cheaper Subscription Plan as Competition Looms

Posted by at 12:04 am on January 2, 2014

netflix-logoNetflix, the nation’s biggest video-streaming service, is offering a plan for $6.99 a month that lets people watch on only one screen at a time. The company’s basic streaming service currently costs $7.99 a month and lets customers watch on two screens at the same time. The move comes as the service eyes close competition from Amazon.

The new offer, which was posted on the company’s website, is part of a broader set of test subscriptions for new customers based on how many screens they use to access the service. The company is also testing a $9.99 subscription for viewing Netflix on as many as three screens simultaneously, and it has had an $11.99 four-stream plan available for a while.

“Whether we offer any of these tiers generally will depend on the results of the tests,” says Jonathan Friedland, a Netflix spokesman.

Netflix is trying to increase the revenue it gets from subscriptions to help it buy more licenses to stream movies and TV shows and pay for the creation of its own content, such as 2013 shows House of Cards and Orange Is the New Black.

The company is also competing with the Amazon video-streaming service included in its Prime subscription, which costs $79 a year and offers free two-day shipping. Amazon Prime subscribers get free access to the Prime Instant Video streaming service for effectively $6.67 a month.

Analysts suggest that the $6.99 test may also help Netflix respond if Amazon unveils a stand-alone video-streaming service that

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