Netflix plans shift to three pricing tiers for new members

Netflix says it may split its streaming subscription options into three separate tiers in the future, but is in no rush to do so. The company says it isn’t sure what the new plan options would look like, but Netflix is currently testing several options in the wild, including 1- and 3-stream per account options, as well as exclusively SD or HD streaming choices.

The tier announcement came from Netflix CEO Reed Hastings in his annual letter to shareholders (PDF) released on Wednesday—a letter where he also admonished America’s ISPs to play nice after a U.S. appeals court shot down the FCC’s net neutrality rules earlier in January.

The two tiers

Netflix introduced a $12 per month family-friendly subscription tier for streaming last April, augmenting its existing $8 per month standard service. The more expensive option better serves households with multiple devices by allowing four streams on as many separate devices at once. The standard plan allows two simultaneous streams.

But now the company has further ambitions to develop its offerings into three separate pricing tiers; however, Hastings isn’t certain when the new tiers would roll out. He also added Netflix is in no hurry to change things anytime soon as the company is still trying to figure out what’s going to work best.

“Eventually, we hope to be able to offer new members a selection of three simple options to fit everyone’s taste,” Hastings said.

The good news for longtime Netflix customers is that the new tiers wouldn’t affect them, at least not at first. Hastings said existing subscribers “would get generous grandfathering for the existing plans and prices.”

Nevertheless, there are ways to lure Netflix fans into forking over more dough if the company really wanted to. Netflix could, for example, only allow 4K streaming for customers in its three-tiered plans. A change like that may not matter in 2014 or even 2015, but could have a big impact down the line if 4K ever becomes the next big TV tech. Options for 1-, 3-, or even 5-streams at once could also convince many customers to jump into the new pricing structure.

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