Netflix set to test out cheaper subscription plan

By Kyle Johnson,

Netflix has announced it will begin to test out a cheaper subscription plan, which would give customers a chance to save a small amount of money, if they limit their watching to one screen at a time.

The online video streaming service will begin to test the new $6.99 plan, a dollar savings, to any customers that could stand watching on just one screen at a time, instead of two, reports USA Today. The $7.99 plan will still be available and there will also be a $9.99 subscription for those who want to watch on three screens at once.

Netflix spokesman Jonathan Friedland said, "Whether we offer any of these tiers generally will depend on the results of the tests."

An Sterne Agee analyst, Arvind Bhatia, said in a note, "The new plan likely has at least two goals: 1. Attract the more value conscious consumer. 2. To more effectively compete with Amazon Prime."

The move is an attempt to find a way to continue to raise revenue to increase Netflix's offering of new shows as Amazon's own video service continues to heat up competition.

Bhatia added, "While the lower price could attract new subscribers, it could also somewhat cannibalize current subscribers given how easy it is to cancel and re-signup for the service."

Also, the popular video streaming service will be losing some hit movies and TV shows at midnight due to expiring TV and movie license deals. Some of the movies and shows that will be disappearing include Top Gun, Titanic, Saturday Night Live The 2000s and Dark Shadows.

image: Amazon


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