Netflix Unveils a New Pricing Plan - But Don't Worry
By Phillip Swann
TVPredictions.com
http://www.tvpredictions.com/netflix042313.htm
Washington, D.C. (April 23, 2013) - After considerable buzz yesterday
that Netflix may announce a plan to restrict account sharing between
family and friends, the online video service instead unveiled a new
'Family' pricing plan that would allow an individual account to watch up
to four streams at the same time.
The plan, which Netflix said would be available soon, will cost $11.99 a
month instead of the usual $7.99 for unlimited streaming on two devices
at the same time.
Netflix CEO Reed Hastings yesterday publicly said he expects a "lot of
families will take advantage" of the new Family plan. But in a letter to
shareholders, Netflix revealed that it believed fewer than one percent
of its subscribers will sign up for the Family Plan.
Company executives yesterday downplayed suggestions from Wall Street
analysts that it should crack down on account sharing, forcing possibly
millions of people to subscribe on their own. Michael Pachter, a Wedbush
Securities analyst, estimates that up to 10 million people could be
watching Netflix streaming without paying.
But perhaps still feeling the heat from losing 800,000 subscribers in
2011 after it effectively raised prices 60 percent for streaming and
disc users, Netflix CEO Reed Hastings yesterday said he didn't think
sharing passwords was a serious problem, although he added that he felt
that sharing them with extended family was not "appropriate." That
remark seemed to leave the door open for future action on account sharing.
Netflix's new Family plan was just one of several disclosures from the
company yesterday as it released its first quarter report. In other items:
* Netflix said it added three million streaming subscribers (2.03
million in the U.S.) in the first quarter, bringing its worldwide total
to roughly 36 million. The company's U.S. streaming subscriber total is
now 29.2 million, which means it has surpassed HBO. The latter has 28.7
million subscribers in the U.S. The 2.03 million sub additions in the
U.S. was slightly less than the previous quarter when it added 2.05 million.
* DVD subs continue to decline, falling to eight million total after the
first quarter; it was 8.2 million after the previous quarter and 10.1
million a year ago.
* Netflix is allowing its licensing deal with Viacom to expire in May,
which means that streamers could suddenly lose shows from Nickelodeon,
MTV and Comedy Central at that time. However, the company said it wants
to rework the deal with Viacom so it would license individual shows
rather than entire channels.
* Hastings said House of Cards, the highly publicized original drama
from Netflix, had a "gentle impact" on first quarter sub additions. He
added that only 8,000 people signed up for a one-month free trial to
watch House of Cards and then cancelled after viewing it, a sign that
the new subscribers were content with the service's other content.
* Netflix has previously said it might do 10 original shows every year,
but Hastings yesterday said that number could be bumped to 20.
"Long term, we believe the value of our original series in driving
acquisition and retention improvements will be borne out as we add more
seasons of already popular shows like House of Cards and further
series," Netflix says in the shareholders letter.
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