Netflix is testing a new, cheaper subscription plan

December 31, 2013 12:32 PM

Movie rental and streaming firm Netflix Inc. is offering a new, cheaper subscription plan to new members who are willing to limit their use to one screen at a time. 

This one-screen plan will cost $6.99 per month, a dollar cheaper than the company’s current base streaming subscription plan that allows the user or users to stream to two screens at once, making it possible to share with friends or family.  Netflix also offers a family plan that costs $11.99 per month and allows users to stream on up to four screens at once. 

The family plan was announced in April of 2013.  This new subscription plan comes at the same time as CEO Reed Hastings will be receiving a 50% increase in compensation in 2014—to $3 million from $2 million in salary, and to $3 million from $2 million in stock options—according to a regulatory filing this week with the Securities and Exchange Commission.  The $6.99 single stream subscription is being tested and may not be available to every user and Netflix may not ever offer it generally, according to a Netflix spokesman.

Netflix is No. 9 on Internet Retailer’s Top 500 Guide and has more than 40 million members that stream more than 1 billion hours of TV shows and movies per month, according to the company’s latest financial report.  Netflix also accounts for 31.6% of all Internet traffic in North America, according to a report by Sandvine, a Canadian networking equipment company.  Combined with YouTube, the two companies account for more than 50% of all downstream traffic in North America.




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