Netflix Looking at New Pricing Strategies

Jan 23, 2014  •  Post A Comment

Netflix is considering new pricing strategies, including charging more for customers who share accounts with friends and family members, reports Bloomberg.

Chief Executive Reed Hastings wrote in an investor letter Wednesday that the company is hoping “to offer new members a selection of three simple options to fit everyone’s taste.” One option would be an $11.99 monthly price for accounts that are shared among family and friends.

Last month, Netflix started offering some new customers a $6.99 monthly plan, while it also offers its standard $7.99 per-month fee.

Netflix could copy a model it used in Ireland, where it recently raised prices but customers were told they wouldn’t see another fee hike for two years, Hastings said.

“We’re still researching and trying to figure out the best way to move forward,” Hastings told Bloomberg in an interview. “Current subscribers will get to keep their current plan and price for a generous time period.”

The price increase in Ireland suggests the company could hike its rates without seeing the kind of customer backlash it encountered in 2011. Netflix angered subscribers by hiking its fees by 60%, as we reported at the time.

Netflix said it will add 2.25 million new domestic customers in the current quarter.

It also said that total streaming subscribers grew to 44.4 million worldwide in the fourth quarter, and that net income for the period jumped more than fivefold, reaching $48.4 million. Revenue, meanwhile, jumped 24% to $1.18 billion.

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3 Comments

  1. Hey Netflix, before you raise my rates I just wanted you to know that I watch a lot more on Amazon prime because their selection is better. I keep Netflix because it is cheap enough that I don’t mind paying the monthly fee for the few movies I watch on the service.

  2. I look forward to the day that Netflix files for Chapter 11 and becomes the next Blockbuster failure. Go Amazon Prime!

  3. Reed – Why do you think everyone is dropping their cable? Continual increases for less quality programming.

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