December 31, 2013
Netflix Lowers Price On Standard Definition Streaming Package
Peter Suciu for redOrbit.com – Your Universe Online
On Tuesday, video streaming service Netflix introduced a new budget subscription plan that appears to be aimed at consumers who haven’t upgraded to high-definition TV and only want the service delivered to a single device.
While the company will still offer its $12-per-month plan that allows subscribers to stream on four devices simultaneously, this new single device plan will be offered for $6.99. This is $1 less than the current $7.99 single device plan, but the catch is that this new plan is only for standard definition content.
“We always are testing new things and this is a test for a $6.99 single stream plan,” a Netflix spokeswoman told Ad Week. “Not all people will see this option and it may not be something we ever offer generally.”
Netflix recently passed pay-TV network HBO’s domestic subscriber count, and the streaming service now has some 40 million subscribers. The over-the-top (OTT) service has been seen as a major disrupter to the traditional cable and satellite providers, and it saw its shares climb in October after reporting a strong quarter that included steady subscriber growth.
Netflix has also begun to create original programming as a way to increase its subscriber base, including a US remake of House of Cards that was met with critical acclaim and a new season of Arrested Development. The service also made headlines this year after it received a total of 14 Emmy nominations and three wins. The company, which spent $100 million to produce two seasons of House of Cards, will reportedly double the budget to produce original content in 2014.
Netflix could be trying to cover both ends of the TV viewing market: those who have opted to stick it out with older TVs and who are budget minded, as well as those who are looking for 4K or Ultra HD content. Stuff reported on Tuesday that Netflix will start streaming movies and TV shows in 4K, but only to certain TVs.
“We’re not naming specific manufacturers,” said Netflix Chief Product Officer Neil Hunt. “But we have several of the major TV vendors who are going to be producing 4K capable TVs – they’ll be announcing them at CES (next week).”
As cable and satellite likely won’t be able to provide the 4K, which offers four times the resolution of HDTV, in the near future, OTT services such as Netflix could be the only way to get content to these high-end sets.
The question of course becomes exactly who then might be interested in the standard definition content. While it could be for those who opt to watch TV on a computer monitor, perhaps it could be for those who typically use Netflix on the go rather than as a home viewing option.
As TechCrunch noted, “Offering a standard-def stream to one device might as well be called ‘the smartphone plan’, as that’s what it seems most suited to. Though many smartphone screens are above HD resolution, the smaller real-estate means that it can be difficult to discern a standard-def stream from a high-definition one.”
Ad Week also noted that the standard definition plan is only available to new subscribers, not current Netflix users, but that it could be added eventually.