Netflix Tries Out $6.99 Single-Stream Tier

Targets Select New Subscribers With Cheaper, Standard-Definition-Only Option

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.

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"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.