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Netflix tests out $7 service plan on new customers

Netflix has unveiled an experimental new tier to its growing collection of subscription services. In addition to the company’s regular $8/month plan, and deluxe $12/month plan, which offer standard and HD streaming on 2 and 4 devices at a time respectively, the company is testing out a new $7/month plan for new users only, which offers frugal viewers standard def viewing on one device at a time.

While most of us, even the bachelor/bachelorette set, would consider stepping down to standard def to save the monthly equivalent of a McDonald’s cheeseburger a strange choice, the new experiment could be seen as more of a litmus test for Netflix’s massive 40 million-strong subscription pool. Testing the new plan on a small sector of customers, with no solid plans of offering it on a broad base permanently (according to Geekwire), allows Netflix to test the waters of what people want, without creating a massive blunder like the Qwikster debacle.

Moreover, the company’s gradual roll-out of tiered plans shows how savvy Netflix has become in its response to customers who share accounts to save money. The larger $12 plan offers families the ability to keep up to four members happy at once, without the after-dinner race to the iPad or Roku, as well as saving them the expense of going all-in on a double membership. But it also allows Netflix to bring in more revenue from users who are already sharing plans, without cracking down too hard on its loyal base and looking like the bad guy. 

As the data would suggest, when people consider legal means to acquiring content a reasonable option, they are far less likely to hoist the pirate flag. In Netflix’s case, it seems the same philosophy can apply to reining in the abuse of subscription services.

While the new $7/month budget plan may never make it to the showroom floor for the majority of users, for now it’s one more option Netflix can offer to an increasingly diverse user base, who also have increasing options vying for their attention. What’s more, it’s proof that, as things stand, Netflix’s ability to adapt continues to prove it belongs at the top of the streaming heap.

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