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Netflix Tries Out $6.99 Single-Stream Tier

Targets Select New Subscribers With Cheaper, Standard-Definition-Only Option 12/30/2013 8:11 PM Eastern

In a move that could expand its reach to a broader set of cost-conscious consumers, Netflix confirmed Monday that it is testing a lower-priced, single-stream tier to select new subscribers that delivers content only in standard-definition.

The new pilot subscription tier runs $6.99 per month, and lets users stream video to one screen at a time. That’s $1 less than Netflix’s $7.99 standard service, which offers access to the company’s library of high-definition content, and allows subs to stream up to two devices at the same time. Its higher-level, family-oriented tier costs $11.99 per month and allows those subscribers to stream video on as many as four screens at a time in HD and SD.

Netflix has not yet announced how it intends to distribute a 4K offering that will launch early next year, and include access to 4K streams of the second season of Netflix original series House Of Cards.

Multichannel News was offered the $6.99 option when it attempted to sign up for Netflix and its offer of a free month of service. Netflix said it is testing the new single-stream tier to a select number of new subscribers, and has not committed to making it an ongoing offer for new subscribers or to its existing subscriber base.

"At Netflix we continuously test new things. In this case we are testing a $6.99 single stream price point. Not everyone will see this and we may not ever offer it generally," a Netflix spokesman said in a statement.

Netflix did not elaborate on its strategy, but the test tier could make the service more attractive to a broader base of subscribers who, so far, have steered clear of the company’s standard plan. Some consumers might also find the test tier's SD-only approach friendlier to a growing number of usage-based broadband policies being put into place by cable operators and other broadband ISPs. 

Netflix added 1.3 million new domestic streaming subscribers in the third quarter of 2013, an 11% increase from the year-ago period. Netflix ended the third quarter with 31.09 million U.S. streaming subs and 9.19  million international customers.

Adweek first reported of the lower-cost Netflix tier for new customers on Monday. 

 

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