Netflix to Take It Slow and Steady With New Tiered Pricing

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Netflix (NASDAQ:NFLX) reported yet another stellar quarter of financials after the closing bell on Wednesday and announced that it plans to move forward with a three-tier pricing system that will charge subscribers based on the number of devices on which they’d like to have the ability to simultaneously stream programming.

“Last April we introduced a 4-concurrent stream $11.99 option to begin our evaluation of plan tiering. Since late last year, we have also been testing 1-stream and 3-stream variants, as well as SD/HD variations, at various price points. Eventually, we hope to be able to offer new members a selection of three simple options to fit everyone’s taste,” CEO Reed Hastings said in the company’s earnings release.

At the end of last year, it was reported that Netflix’s signup page had begun including three different pricing options for new members. The individual plan allows content to be streamed on one device at a time and costs $6.99 per month, a drop of $1 from current streaming plans. The standard plan costs $7.99 per month and allows members to stream on two devices simultaneously. The family plan costs $11.99 a month and allows streaming on up to four different devices at the same time.

This is Netflix’s way of coping with the increasing trend of subscribers sharing their usernames and passwords with friends and family. Hastings spoke about the shared accounts problem during the company’s earnings call in April, according to Market Watch. “We usually like to think that a husband and wife can share an account and that that’s perfectly appropriate and acceptable,” he said at the time. “If you mean, ‘Hey, I got my password from my boyfriend’s uncle,’ then that’s not what we would consider appropriate.”

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