Netflix will charge you more for sharing with your family

Netflix will charge you more for sharing with your family

Netflix aims to keep investors' spirits high with new pricing models

Ever notice that newish feature they built into Netflix, the one where it asks “who’s watching?” You, being an honest American consumer of entertainment, likely added profiles for each member of your home. Bad move. Netflix is now aware that you’re using one account across several people and devices across the household, and they intend to charge you for the privilege. $11.99 for up to four screens, to be exact.

Financial analysts in the tech sector are bullish on the move from the world’s largest streaming video supplier, viewing it as a move to cut down on illegal sharing of services. “I am sure that they have the ability to monitor device use,” said Michael Pachter, an analyst at Wedbush Securities in Los Angeles, who has an underperform rating on the stock. “I admire their resolve to try to combat piracy. This is an ingenious solution.”

If you’d like to view only one program on one screen at a time, Netflix has you covered. In fact, such an option is available at the bargain price of just $6.99 per month, though users on this plan can only watch in standard definition. It’s noted that due to the smaller screens on mobile devices, this may not deter many users. The catch, though, is that this plan isn’t available to everyone, and likely won’t be. According to Netflix, it’s presented to users who initially signed up for a 30-day free trial.

The restriction on the cheaper plan may help alleviate fears that it might not be a sound business move, as noted by some analysts.

“If $6.99 enables Netflix to reach more consumers than $7.99 that’s obviously positive but it’s hard to imagine the $1 being a major price inhibitor,” said Richard Greenfield, an analyst at BTIG LLC who has a neutral rating on the stock. “If consumers who would have taken the $7.99 plan now sign up at $6.99, that all comes out of their profit margin. This is not the next pricing move investors were expecting.”

“We test all the time in an effort to come up with better options for consumers,” Jonathan Friedland, a spokesman for Netflix, said in a phone interview yesterday with Bloomberg. “There are numerous tests at any given time.” The company expects less than 1% of users to upgrade to the $11.99 plan.

Netflix came under fire in 2011, when it briefly experimented with splitting the company into two entities, Netflix for streaming and Qwikster for mail-order DVDs. The experiment lasted only about a month. The company still offers separate plans for streaming and DVD services, with the option of having one DVD at a time running $7.99 per month, the same as the current standard streaming plan.

 

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