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Netflix launches $6.99/month single-screen plan

  • Netflix (NFLX -0.1%) is offering a $6.99/month subscription plan to new sign-ups willing to limit their streaming to one screen at a time, and to standard-definition content. The company's regular $7.99/month plan allows users to simultaneously stream SD or HD content to two devices; more than a few users leverage this feature to share access with friends/relatives.
  • The new offering, not yet available to existing subs, comes eight months after Netflix launched an $11.99/month family plan that provides access to four streams at once. Reed Hastings stated in July uptake has been "minimal," as expected.
  • Assuming it's provided to existing subs, Netflix's move could make a future price hike (something many bulls are counting on) more palatable to some cost-sensitive users, by allowing them to obtain a lower price by "downgrading" to a single-screen plan.
Comments (11)
  • JeffClarke
    , contributor
    Comments (8) | Send Message
     
    I'm still amazed that Netflix has stayed afloat this long. I used Netflix over a year ago, enjoyed it though quickly found that movie choices were very limited and when they changed their pricing structure, dropped the service and used RedBox when I needed to watch something newly released. Since then, I revisited it last month, started a free trial and quickly discovered that the choices are even more limited and within a few nights watched anything worth watching (in my opinion). I feel the Hollywood houses are missing out on a huge bonanza to allow all current and past movies not in the theater to be streamed. Time-Warner is getting close. Right now I watched more movies at $3 to 5.99 a pop on my Time-Warner Box then on Netflix.
    30 Dec 2013, 04:46 PM Reply Like
  • Sakelaris
    , contributor
    Comments (1446) | Send Message
     
    This argument about the Netflix streaming selection being too limited continues to puzzle me. There is really so much to see.

     

    Of course, it involves doing some work, searching through its rich catalog. Some may find the 10,000 or more Netflix streaming alternatives just overwhelming and will prefer to deal with the much more limited selection presented by a Redbox machine or what might be playing on about fifty or so cable/satellite channels.

     

    Oh, are 10,000 choices not enough? The get about ten times as many by adding a DVD rental arrangement to your Netflix service.
    30 Dec 2013, 11:35 PM Reply Like
  • greenspan76
    , contributor
    Comments (42) | Send Message
     
    I think what he means is limited selection of things worth watching. Sure, there are thousands of movies/TV shows, but most people have a limited scope of interests (or at least are willing to spend a limited amount of time looking for things that match their interests). In addition, movie/TV show technology, acting, and subject matter changes so much that things beyond 5-10 years old are mostly out of touch with today's audiences. After spending hours and hours searching through and finding movies, I reached a point where I was no longer willing to spending time searching for old content. When I reached that point, I realized the new content wasn't enough to justify the cost of a subscription for me as long as I continue to see the movies I want to see in the theatre and watch the TV shows I want to watch on TV (generally by DVR).

     

    I'm not sure how many people would cancel their service due to various changes in price, but there is some price point at which the cost of the lost subscriptions is greater than the gain from extra revenue. Netflix obviously wants to find the sweet spot where revenue is maximized - if it were so easy to do they'd have already figure it out.
    31 Dec 2013, 02:17 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1446) | Send Message
     
    Concerning the need for content that is from the last five to ten years, check this out and you will see that the most frequent release years for today's Netflix streaming content were 2009 through 2012.

     

    http://bit.ly/1cioZ7F

     

    I will grant that the "Instantwatcher" source that I reference might not be 100% complete, but it does show that a lot of pretty recent stuff gets on streaming. As for 2013 releases, the stuff from the first half of the year is now well covered by the DVD service.
    31 Dec 2013, 03:25 AM Reply Like
  • skibimamex
    , contributor
    Comments (443) | Send Message
     
    i am shocked how little JC knows about the media content licensing regime. It seems that you are primarily focused on recent film releases as content that is "worthwhile". Fundamentally that does not exist, or rather, it does NOT exist on ANY subscription service. That is because the major studios have well scripted release "windows": 1) theatrical, 2) DVD and EST (electronic sell-through), 3) PPV and rental (cable, Amazon, Vudu, ITunes, et. al, also private venue such as airplane), 4) Pay 1, 5) 2nd-run theatrical, 6) Pay 2 and television syndiction, 7) catalog.

     

    Winodws 1, 2, 3, 5, and 7 are mass distribution and Non-Exclusive (i.e. you can find it at one theater chain, but also the two others near by, or you can buy the same DVD at Target or WalMart; similarly, in the PPV window, you can rent it on iTunes, Amazon, or WalMart's Vudu. by the time it gets on deep catalog, it's non-exclusive and can be found among multiple outlets (broadcast tv, basic cable, all the subscription streaming services, ad-supported streaming services such as Sony's Crackle, and also as rotational "fill" for the subscription pay cable services)

     

    Windows 4, and 6 are the ONLY exclusive exhibition windows. When you see a pay cable 1 release on HBO for Fox, Universal, and Warner recent releases, you can't find it anywhere else. Similarly, Starz currently has Sony and Disney and will be getting Lionsgate at end of 2014, but Netflix will be getting all the Disney studios (Disney, Buena Vista, Marvel, Lucas FIlms, Pixar) in 2015 to add to its exclusives with DreamWorks Animation, Weinstein, FilmDistrict, and some other indies. Meanwhile, Epix, the pay cable channel JV formed by Paramount (Viacom), Lionsgate (Summit and Lionsgate), and MGM will be losing LGF's output to Starz despite the fact that LGF is an equity partner in Epix. EPix also redistributes its content in a so-called "Pay 1.5" window on a non-exclusive basis to each of Netflix, Amazon Prime, Redbox Instant, 60 days after it has appeared exclusively on Epix. Showtime, after losing Paramount when Viacom and CBS split via spin-off, is largely left with various independent studios and shifted almost entirely to original content television, independent studios, and back catalog. Therefore, either the studio content is available almost everywhere in ala carte rental (via either streaming or PPV) during the non-exclusive window and THEN IT GOES DARK (i.e. unavailable for rent, but available for purchase only via electronic sell-through) or it then is next distrbuted solely on an exclusive basis to those premium cable channels or SVOD services such as Netflix and HBOGO and fragmented among different channels.

     

    Except in the UK, where BSkyB currently has the exclusive Pay 1 release window output deals with all 6 major studios (and which it is likely to lose at least a couple to Netflix), nowhere else in the world does this exist as licensing is largely on a film by film basis, and certainly no one else has felt the need to lock up output deals from all six major studios.

     

    Therefore, whereas you are critical of Netflix's lack of recent studio content, it merely demonstrates your unfamiliarity of how content is distributed. All the major pay channel services (except Epix since it is so new and doesn't have the resources and distribution to support beyond its current film only strategy) such as HBO, Netflix, Showtime, and Starz have all evolved to original content as a core content differentiator that is supplemented by near recent studio releases. Netflix further differentiated by getting back season exclusives (that means only on Netflix) of major serialized drama brands from television (these are really long-form movies for each season) as well as certain verticals such as foreign films and children programming.

     

    What you choose to be "shocked" about just doesn't really matter, as Netflix will become the largest SVOD premium channel pay service in the US (surpassing HBO) this quarter because its value proposition has demonstrated mass consumer appeal, notwithstanding how you find otherwise.

     

    I think it is funny that all the bears all jump up and down and insist that Netflix must increase its prices, while it just dropped its entry price (to further make it difficult for new entrants) to accelerate adoption, while simultaneously shifting the value proposition for core users to eventually raise ARPU via family plans. Brilliant strategic initiative.

     

    The bear guys still dont realize that the best premium pay cable services only net in the high $7's for the cream of the crop such as HBO, down to the $2+/sub/mo range for Starz.. The pay cable networks are salivating at Netflix's ability to create its own direct-to-consumer distribution and worry about being trapped by their current MVPD distribution paradigm (and the resulting high cost distribution that creates burdensome pricing umbrella and high subscriber churn).
    31 Dec 2013, 10:31 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1446) | Send Message
     
    The moral I take away from the skikimamex post: Good content comes to those Netflix customers who are willing to wait, whether by streaming or by DVD rental.
    31 Dec 2013, 11:00 AM Reply Like
  • Say What?
    , contributor
    Comments (175) | Send Message
     
    >> ...while it just dropped its entry price ...Brilliant strategic initiative. <<

     

    LOL! Hardly strategic - rather it was desperate tactical move to "try" and deal with the fact they can't raise prices on their core customers,...other than by degrading the service.
    31 Dec 2013, 05:10 PM Reply Like
  • greenspan76
    , contributor
    Comments (42) | Send Message
     
    I know your response isn't directed at me, but while it sounds like you're very well-informed about this subject, I can't help but think that I'm no different than the vast majority of consumers in that I don't give a flying crap about what the deals are - all I care about is if something I want to see is available to me when I want it and in the format I want it. If it isn't, I won't pay for any service while I wait for it to come available.

     

    Now, I recognize that there are a large number of people who are willing to pay for the service and wait (and some that find plenty to watch without the need for waiting), but one of the big problems NFLX has had is that some consumers have adopted the practice of subscribing, binge-watching, then unsubscribing until the next year, when they binge-watch again. NFLX understands this and has begun to address the issue. In doing so, there are some casual customers who are going to be irritated and the question is how many and whether it will affect the number of subscribers.

     

    All I know is what I hear when I talk to customers and former customers of NFLX. In my personal experience, I see lots of people who are on the fence about keeping the service because they rarely actually use it. There are a few that think it's cheap enough that they don't care if they use it frequently or not, but only rarely do I come across people who watch NFLX extensively and think its a great deal. Of those that do watch extensively, almost all the ones I've met do so because they have cut cable/satellite and gone to NFLX to save money. This is primarily among average, middle-class families. An improvement in their economic situation equates to replacing NFLX, as opposed to complementing it.

     

    I really have no dog in the fight as I only ever trade ST options on NFLX and, though I make plenty to afford the service, I don't find it valuable to my needs.
    1 Jan, 12:20 AM Reply Like
  • skibimamex
    , contributor
    Comments (443) | Send Message
     
    conditioning the user base for ala carte pricing. cable operators charge based upon each STB so this isn't too different. HBOGO originally, at launch, limited to 1 at a time (you actually had to proactively disconnect or you wer eblocked from loggin in from another device) but then changed its software to allow up to 3 at a time to match then Netflix policy; don't know if HBOGO dropped to 2 to match NFLX's current policy.

     

    By the way, this is not really 2 "devices", at least not currently, but rather 2 IP addresses -- if you are going through one router, such as at your home with multiple iPads and Roku's on same router, that is treated as one location. At least currently that is how it still works, because they can't recognize you. I do not know (haven't checked yet) given the personalization interface, where each self declares themselves as a different profile, whether that now allows NFLX to discriminate.

     

    I suspect at some point, the heavy users such as my household, will upgrade to the family plan... so ARPU will eventually creep up.
    30 Dec 2013, 04:48 PM Reply Like
  • fresh s
    , contributor
    Comment (1) | Send Message
     
    Sakelaris - The counts don't matter, 10k movies with 9700 bad ones is still nothing - I agree with Jeff shocking they've done nothing to enhance their offering and more shocking more start ups have not risen to knock them off their seemingly easily toppled pedestal.
    31 Dec 2013, 02:20 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1446) | Send Message
     
    In November I was challenged on that issue of worthwhile programming and I made some extensive lists of Netflix content then. I copy them here, a few items have gone off streaming and others have been added, but this does show quite a choice.

     

    There are the five Star Trek TV series and two of the Star Trek movies (the other movies are on DVD rental).

     

    There are other notable TV series: The Twilight Zone, The Wonder Years, Doctor Who, Cheers, Frasier, Andy Griffith, Leave It To Beaver, Hart of Dixie, Young Indiana Jones, 30 Rock, Arrested Development, Portlandia, The Office, Breaking Bad, How I Met Your Mother, American Dad, Rules of Engagement, It's Always Sunny In Philadelphia, The West Wing, Mad Men, Ally McBeal, Battlestar Galactica (both old and new), Airwolf, Knight Rider, Emergency, Adam 12, Kolchak The Night Stalker, Mission Impossible, Miami Vice, Sesame Street, Magnum PI, Amazing Stories, Family Guy, The Cleveland Show, Highlander, The Vampire Diaries, Dexter, Braxton Family Values, The Rockford Files, Columbo, The A Team, Coach, Quincy, ME, Wings, Quantum Leap, Everybody Loves Raymond, Law and Order, Dinosaurs, The X Files, 'Til Death, Alfred Hitchcock Presents, Terra Nova, Doc Martin, Glee, Sons of Anarchy, Waiting For God, The Office (UK), The Carrie Diaries, Dawson's Creek, Alias, My Boys, Saving Grace, Drop Dead Diva, Crossing Jordan, Chuck, Sister Wives, Leverage, The Addams Family, several Charlie Brown shows, and many others.

     

    And Academy Award winning movies: Gentleman's Agreement, Ordinary People, Terms of Endearment, Platoon, The Last Emperor, Braveheart, The King's Speech, Shakespeare In Love, True Grit (1969), and The Artist.

     

    And other movies: Skyfall, Captain America, The Avengers, The American, The Pianist, Do The Right Thing, Broadcast News, Gallipoli, High Noon, Last Tango In Paris, Love Story, Somewhere In Time, Urban Cowboy, National Lampoon's Christmas Vacation, Teen Wolf, The Falcon and the Snowman, Olympus Has Fallen, Flight, Glengarry Glen Ross, Capote, Jackie Brown, Mansfield Park, Jarhead, Miller's Crossing, Lost in Translation, Pulp Fiction, Once Upon A Time In The West, Terminator 2, Life Is Beautiful, Rosemary's Baby, Double Indemnity, Hatchi, Move Over Darling, Eternal Sunshine of the Spotless Mind, Metropolis Restored, Butch Cassidy and the Sundance Kid, Far And Away, The Pit, Mirror Mirror, The Man Who Shot Liberty Valence, Roman Holiday, Manhattan, For Greater Glory, Nosferatu, The Untouchables, River Of No Return, The African Queen, Ulzana's Raid, Twelve O'clock High, Shane, The Long Goodbye, Breaking Away, Slap Shot, and Serpico, all three Mission Impossible movies and nine Mystery Science Theater 3000 movies.

     

    Coming soon: The 2012 Red Dawn movie!

     

    If you like documentaries, there are many of those as well.

     

    If you do not see one particular item in my listings, chances are it can be seen via the Netflix DVD service. I would need days to list all of the interesting DVD choices that are available.

     

    A few hours later I had more to list:

     

    More Netflix streaming TV options: The Hardy Boys/Nancy Drew Mysteries, Last Man Standing, Hyperdrive, Monarch of the Glen, North and South (UK), Army Wives, 19 Kids and Counting, Beauty and the Beast, Being Human, Call the Midwife, Dallas (2012), Emily Owens MD, Grey's Anatomy, Gossip Girl, My Fair Wedding, Nikita, Parenthood, Revolution, about 370 Saturday Night Live shows, American Dad, Gold Rush.

     

    More Netflix streaming movie options: Six Veggietales movies, Hello Sister Goodbye Life, Under New Management, Happy Ever Afters, What If..., God's Country, Backwards, Bachelorette, Monsters, Transformers Dark of the Moon, The Hunger Games, Super 8, Conan the Barbarian, and Madea's Witness Protection.
    1 Jan, 02:07 AM Reply Like
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